CA ADJUSTERS EVALUATION TEST EXAM 2025/2026
QUESTIONS AND ANSWERS GRADED A+
✔✔Which of the following is the term used to describe the determination by a health
benefit plan, based on the information presented at the time by the health care provider,
that health care services proposed by the health care provider are medically necessary.
Notification of claim
Claim investigation
Verification of eligibilty
Preauthorization/precertification - ✔✔The correct answer is:
Preauthorization/precertification
EXPLANATION:
The question provides you with the definition of preauthorization/precertification.
✔✔Which of the following is true regarding the amount of subrogation by an insurance
company?
The insurance company can subrogate only for the actual amount paid.
The insurance company can subrogate for the actual amount paid, plus the insured's
deductible.
The company can subrogate for any amount authorized by the insured.
None of the responses listed are correct. - ✔✔The correct answer is: The insurance
company can subrogate for the actual amount paid, plus the insured's deductible.
EXPLANATION:
The insurer is permitted to subrogate only for the actual amount paid in a loss plus the
insured's deductible if any.
✔✔Under a Commercial Property Policy, what must the insured do to be covered for the
peril of freezing?
Maintain heat in the building or cut off the water and drain the lines.
Install a freezing sensor.
Inspect the water pipes on a regular basis.
Contract with a plumbing company to maintain the system. - ✔✔The correct answer is:
Maintain heat in the building or cut off the water and drain the lines.
EXPLANATION:
The policy specifies that the insured must either maintain heat in the building or turn off
the water and drain the water lines.
✔✔Under the HO Policy, loss of use would cover which of the following?
,Additional Living Expense and Fair Rental Value
Personal Property
The Insured's Liability
Other Structures - ✔✔The correct answer is: Additional Living Expense and Fair Rental
Value.
EXPLANATION:
Coverage D, covers the loss of use of a dwelling. Additional living expense is included
in this coverage as well as the fair rental value coverage.
✔✔Under a Commercial Package Policy, how many days does one have to notify the
insurance company of a claim?
The insurer must be notified promptly. The number of days is not specified
30 days
60 days
10 days - ✔✔The correct answer is: The insurer must be notified promptly. The number
of days is not specified
EXPLANATION:
The policy language states that all claims will be promptly reported to the insurer.
✔✔All of the following are examples of government insurers, EXCEPT:
The state run FAIR plan
The National Flood Insurance Program
The Excess & Surplus Lines Market
Medicare/Medicaid - ✔✔The correct answer is: The Excess & Surplus Lines Market.
EXPLANATION:
The excess and surplus lines markets are privately run insurers that usually writes risks
that the standard market does not want to write.
✔✔Under the Federal Terrorism Risk Insurance Act, who determines that an act of
terrorism has occurred that would be covered under the Act?
The Secretary of the Treasury
The President
The Vice President
The Majority Leader of the Senate - ✔✔The correct answer is: The Secretary of the
Treasury.
EXPLANATION:
The Secretary of the Treasury in concurrence with the Secretary of State and the
Attorney General must certify an act as an act of terrorism. However please note, the
,Act was amended and extended in 2015. Please refer to the testing vendor outline to
determine which version of the Act it will test on in your state. Under the 2015
amendment, known as the Terrorism Risk Insurance Extension Act of 2015 (TRIEA), an
act of terrorism must still be certified by the Secretary of Treasury. However, it must
now be certified in concurrence with the Secretary of Homeland Security instead of the
Secretary of State.
✔✔What is the loss assessment limit provided by Section II of the homeowner forms?
$500
$1,500
$1,000
$2,000 - ✔✔The correct answer is: $1,000.
EXPLANATION:
The HO policy under Section II provides $1,000 for loss assessment. This usually
occurs when the insured is part of a property owner's association that has suffered a
liability loss and assesses the homeowners for part of the loss.
✔✔Which of the following statements is true regarding controlled forms?
These forms are very flexible and can be manuscripted to meet the needs of individual
insured's.
These forms are always issued by state insurance departments.
Conditions and rates for these forms are determined solely on the basis of underwriting
judgment.
These forms are usually issued according to published rules and rates. - ✔✔The correct
answer is: These forms are usually issued according to published rules and rates.
EXPLANATION:
Controlled forms and their rates are filed for approval with the state insurance
departments. They are usually issued according to published rules and rates. A jewelers
block policy is an example.
✔✔If the Commissioner determines that any broker-agent has failed to keep or maintain
complete and accurate records, the Commissioner may order the licensee to establish
those records within:
10 days.
6 months.
60 days.
30 days. - ✔✔The correct answer is: 60 days.
EXPLANATION:
According to the California Insurance Code (CIC 1747), when the Commissioner
determines that any broker-agent has failed to keep or maintain complete and accurate
, records as required by law, in connection with or in lieu of any other disciplinary action
against the licensee, the Commissioner may issue an order requiring the licensee to
establish and currently complete those records within 60 days from the date of the
order. Any licensee failing to comply will be subject to disciplinary action.
✔✔The California Insurance Commissioner is:
Elected to a four-year term.
Appointed by the governor for a two-year term.
Appointed by the legislature for a four-year term.
Selected by a committee. - ✔✔The correct answer is: Elected to a four-year term.
EXPLANATION:
The state legislature has established that the Insurance Commissioner should be an
elected position rather than a political appointment.
✔✔Which of the following could be considered a "covered auto" on the PAP?
A newly acquired car reported to the insurer
A owned vehicle not listed on the declarations page
A non-owned vehicle available for regular use
A vehicle used in speed contests - ✔✔The correct answer is: A newly acquired car
reported to the insurer.
EXPLANATION:
The insured has 14 days to report a newly acquired auto which has been done in this
case. The other three answers would all be excluded.
✔✔The definition of bodily injury includes:
I. Death.
II. Sickness.
III. Perils of the sea.
IV. Slander.
I and II only
I, II, and III only
II, III, and IV only
I, II, III, and IV - ✔✔The correct answer is: I and II only.
EXPLANATION:
Bodily injury does not occur as a result of slander, which is a personal injury coverage.
Perils of the sea are damages that can occur to property when it is transported across
water.
QUESTIONS AND ANSWERS GRADED A+
✔✔Which of the following is the term used to describe the determination by a health
benefit plan, based on the information presented at the time by the health care provider,
that health care services proposed by the health care provider are medically necessary.
Notification of claim
Claim investigation
Verification of eligibilty
Preauthorization/precertification - ✔✔The correct answer is:
Preauthorization/precertification
EXPLANATION:
The question provides you with the definition of preauthorization/precertification.
✔✔Which of the following is true regarding the amount of subrogation by an insurance
company?
The insurance company can subrogate only for the actual amount paid.
The insurance company can subrogate for the actual amount paid, plus the insured's
deductible.
The company can subrogate for any amount authorized by the insured.
None of the responses listed are correct. - ✔✔The correct answer is: The insurance
company can subrogate for the actual amount paid, plus the insured's deductible.
EXPLANATION:
The insurer is permitted to subrogate only for the actual amount paid in a loss plus the
insured's deductible if any.
✔✔Under a Commercial Property Policy, what must the insured do to be covered for the
peril of freezing?
Maintain heat in the building or cut off the water and drain the lines.
Install a freezing sensor.
Inspect the water pipes on a regular basis.
Contract with a plumbing company to maintain the system. - ✔✔The correct answer is:
Maintain heat in the building or cut off the water and drain the lines.
EXPLANATION:
The policy specifies that the insured must either maintain heat in the building or turn off
the water and drain the water lines.
✔✔Under the HO Policy, loss of use would cover which of the following?
,Additional Living Expense and Fair Rental Value
Personal Property
The Insured's Liability
Other Structures - ✔✔The correct answer is: Additional Living Expense and Fair Rental
Value.
EXPLANATION:
Coverage D, covers the loss of use of a dwelling. Additional living expense is included
in this coverage as well as the fair rental value coverage.
✔✔Under a Commercial Package Policy, how many days does one have to notify the
insurance company of a claim?
The insurer must be notified promptly. The number of days is not specified
30 days
60 days
10 days - ✔✔The correct answer is: The insurer must be notified promptly. The number
of days is not specified
EXPLANATION:
The policy language states that all claims will be promptly reported to the insurer.
✔✔All of the following are examples of government insurers, EXCEPT:
The state run FAIR plan
The National Flood Insurance Program
The Excess & Surplus Lines Market
Medicare/Medicaid - ✔✔The correct answer is: The Excess & Surplus Lines Market.
EXPLANATION:
The excess and surplus lines markets are privately run insurers that usually writes risks
that the standard market does not want to write.
✔✔Under the Federal Terrorism Risk Insurance Act, who determines that an act of
terrorism has occurred that would be covered under the Act?
The Secretary of the Treasury
The President
The Vice President
The Majority Leader of the Senate - ✔✔The correct answer is: The Secretary of the
Treasury.
EXPLANATION:
The Secretary of the Treasury in concurrence with the Secretary of State and the
Attorney General must certify an act as an act of terrorism. However please note, the
,Act was amended and extended in 2015. Please refer to the testing vendor outline to
determine which version of the Act it will test on in your state. Under the 2015
amendment, known as the Terrorism Risk Insurance Extension Act of 2015 (TRIEA), an
act of terrorism must still be certified by the Secretary of Treasury. However, it must
now be certified in concurrence with the Secretary of Homeland Security instead of the
Secretary of State.
✔✔What is the loss assessment limit provided by Section II of the homeowner forms?
$500
$1,500
$1,000
$2,000 - ✔✔The correct answer is: $1,000.
EXPLANATION:
The HO policy under Section II provides $1,000 for loss assessment. This usually
occurs when the insured is part of a property owner's association that has suffered a
liability loss and assesses the homeowners for part of the loss.
✔✔Which of the following statements is true regarding controlled forms?
These forms are very flexible and can be manuscripted to meet the needs of individual
insured's.
These forms are always issued by state insurance departments.
Conditions and rates for these forms are determined solely on the basis of underwriting
judgment.
These forms are usually issued according to published rules and rates. - ✔✔The correct
answer is: These forms are usually issued according to published rules and rates.
EXPLANATION:
Controlled forms and their rates are filed for approval with the state insurance
departments. They are usually issued according to published rules and rates. A jewelers
block policy is an example.
✔✔If the Commissioner determines that any broker-agent has failed to keep or maintain
complete and accurate records, the Commissioner may order the licensee to establish
those records within:
10 days.
6 months.
60 days.
30 days. - ✔✔The correct answer is: 60 days.
EXPLANATION:
According to the California Insurance Code (CIC 1747), when the Commissioner
determines that any broker-agent has failed to keep or maintain complete and accurate
, records as required by law, in connection with or in lieu of any other disciplinary action
against the licensee, the Commissioner may issue an order requiring the licensee to
establish and currently complete those records within 60 days from the date of the
order. Any licensee failing to comply will be subject to disciplinary action.
✔✔The California Insurance Commissioner is:
Elected to a four-year term.
Appointed by the governor for a two-year term.
Appointed by the legislature for a four-year term.
Selected by a committee. - ✔✔The correct answer is: Elected to a four-year term.
EXPLANATION:
The state legislature has established that the Insurance Commissioner should be an
elected position rather than a political appointment.
✔✔Which of the following could be considered a "covered auto" on the PAP?
A newly acquired car reported to the insurer
A owned vehicle not listed on the declarations page
A non-owned vehicle available for regular use
A vehicle used in speed contests - ✔✔The correct answer is: A newly acquired car
reported to the insurer.
EXPLANATION:
The insured has 14 days to report a newly acquired auto which has been done in this
case. The other three answers would all be excluded.
✔✔The definition of bodily injury includes:
I. Death.
II. Sickness.
III. Perils of the sea.
IV. Slander.
I and II only
I, II, and III only
II, III, and IV only
I, II, III, and IV - ✔✔The correct answer is: I and II only.
EXPLANATION:
Bodily injury does not occur as a result of slander, which is a personal injury coverage.
Perils of the sea are damages that can occur to property when it is transported across
water.
