CA ADJUSTERS LICENSE PSI
QUESTIONS AND ANSWERS
Other-structures-are-excluded-from-coverage-under-the-HO-3-when-they-are:
Smaller-than-100-square-feet-or-larger-than-1,000-square-feet-
Smaller-than-100-square-feet-or-larger-than-500-square-feet-
Used-for-storage-purposes-
Used-for-business-purposes---ans-✔✔Used-for-business-purposes-is-correct.
EXPLANATION:
When-the-other-structures-are-used-for-business-purposes-they-are-not-covered-under-
the-homeowner-form.-This-structure-and-its-contents-could-be-covered-under-a-
commercial-property-policy.-An-exception-would-be-a-detached-structure-used-to-store-
business-property-of-a-non-flammable,-non-gaseous-nature.
An-insurance-company-must-give-how-many-days-notice-of-cancellation-for-a-vacancy-of-
more-than-60-days,-when-the-government-has-ordered-demolition,-or-when-fixed-items-
are-being-removed-and-not-replaced?
5-
21-
10-
30---ans-✔✔5-is-correct.
EXPLANATION:
The-cancellation-changes-endorsement-is-the-"mandatory-endorsement"-referred-to-in-
the-question.-In-California,-the-endorsement-must-be-included-in-every-commercial-
property-policy.-It-allows-cancellation-by-the-insurer-with-5-days'-notice-for-several-
reasons:-vacancy-or-unoccupancy-for-60-or-more-days;-damages-from-a-prior-covered-
loss-haven't-been-started;-the-government-has-ordered-demolition-or-to-vacate;-fixed-
items-are-being-removed-and-not-replaced;-and,-utilities-are-shut-off-for-30-or-more-days,-
or-property-taxes-are-more-than-one-year-past-due.
Upon-request-made-by-the-consumer,-a-person-who-procures-an-investigative-consumer-
report-on-the-consumer-must-make-a-complete-and-accurate-disclosure-to-the-consumer-
of-the-nature-of-the-report-and-investigation-within:
In-writing-and-mailed-to-the-consumer-within-30-days-of-the-request.-
In-writing-and-mailed-to-the-consumer-within-15-days-of-the-request.-
In-writing-and-mailed-to-the-consumer-within-10-days-of-the-request.-
,In-writing-and-mailed-to-the-consumer-within-5-days-of-the-request.---ans-✔✔In-writing-
and-mailed-to-the-consumer-within-5-days-of-the-request..
EXPLANATION:
This-disclosure-must-be-made-in-writing-and-mailed-or-otherwise-delivered-to-the-
consumer-no-later-than-five-days-after-the-date-on-which-the-request-for-the-disclosure-
was-received-from-the-consumer.
The-insured-has-primary-bodily-injury-and-property-damage-liability-coverage-with-a-
$100,000-limit,-and-a-$1-million-umbrella-liability-policy-with-a-$5,000-self-insured-
retention-limit.-In-which-one-of-the-following-situations-would-the-insured's-umbrella-
liability-policy-typically-not-provide-defense-coverage?
Answer-Choices:-Select-the-Correct-Answer
Five-people-sued-the-insured-for-property-damage-arising-out-of-one-occurrence.-One-of-
the-cases-was-settled-out-of-court-for-$100,000.-
The-insured-was-sued-for-$150,000-in-personal-injury-damages.-
The-insured-was-sued-for-$10,000-in-bodily-injury-damages.-
The-umbrella-liability-policy-would-provide-a-defense-in-all-three-cases.---ans-✔✔The-
correct-answer-is:-The-insured-was-sued-for-$10,000-in-bodily-injury-damages.-
EXPLANATION:
The-claim-would-fall-under-the-underlying-coverage-and-not-the-umbrella-because-the-
underlying-coverage-has-sufficient-limits-in-place.
Question-5-of-100
The-BAP-liability-exclusion-pertaining-to-pollution-removes-coverage-for-each-of-the-
following,-except:
Answer-Choices:-Select-the-Correct-Answer
The-cost-of-governmentally-ordered-clean-up-of-pollutants.-
The-escape-of-pollutants-while-being-transported-by-a-covered-auto.-
The-escape-of-pollutants-caused-by-damage-to-the-property-containing-them-when-the-
damage-results-from-the-use-of-a-covered-auto.-
The-escape-of-pollutants-before-they-are-accepted-by-the-insured-for-movement-onto-a-
covered-auto.---ans-✔✔The-escape-of-pollutants-caused-by-damage-to-the-property-
containing-them-when-the-damage-results-from-the-use-of-a-covered-auto.-is-correct.
EXPLANATION:
If-the-insured's-vehicle-causes-an-accident-with-another-vehicle-or-other-property-(owned-
by-a-third-party)-containing-the-pollutants,-the-loss-is-covered.
Which-of-the-following-would-not-be-covered-under-the-specified-cause-of-loss-physical-
damage-coverage-under-the-commercial-auto-form?
Glass-breakage-
Fire-
Lightning-
Flood---ans-✔✔The-correct-answer-is:-Glass-breakage.
,EXPLANATION:
The-specified-cause-of-loss-form-covers-the-following-perils:-fire,-lighting,-explosion,-theft,-
windstorm,-hail,-earthquake,-flood,-vandalism-or-mischief,-transportation-by-a-
conveyance.-The-coverage-does-not-include-glass-breakage,-hitting-a-bird-or-animal-nor-
falling-objects-or-missiles.
All-of-the-following-events-are-considered-acts-of-terrorism,-EXCEPT:
Acts-of-riot-and-civil-commotion.-
Acts-considered-dangerous-to-human-life,-property-or-infrastructure.-
Acts-resulting-in-damage-within-or-outside-the-United-States.-
Acts-at-the-premises-of-any-United-States-mission.---ans-✔✔The-correct-answer-is:-Acts-
of-riot-and-civil-commotion.-.
EXPLANATION:
Acts-of-riot-and-civil-commotion-are-not-covered-by-the-Act.-These-are-perils-that-are-
covered-by-property-insurance-policies.
A-company-or-staff-adjuster-represents-the-interests-of:
The-insurer.-
The-insured.-
The-claimant.-
The-public.---ans-✔✔The-insurer.-is-correct.
EXPLANATION:
Company-or-staff-adjusters-are-individuals-employed-by-a-property-and-casualty-
insurance-company-to-settle-on-its-behalf-claims-brought-by-insureds.-They-work-directly-
for-the-insurance-company-as-year-round-salaried-employees.-Staff-adjusters-evaluate-
the-merits-of-each-claim-and-make-recommendations-to-the-insurance-company.
Under-the-Personal-Auto-Policy-the-Supplementary-Payments-coverage-is:
Answer-Choices:-Select-the-Correct-Answer
In-addition-to-the-limit-of-liability.-
Added-by-endorsement.-
Included-in-the-limit-of-liability.-
Not-available-under-the-personal-auto-policy.---ans-✔✔In-addition-to-the-limit-of-liability.-is-
correct.
EXPLANATION:
Supplementary-Payments-are-in-addition-to-the-Limits-of-Liability.
When-a-first-party-claim-is-made,-what-must-be-listed-on-the-payment-draft?
Answer-Choices:-Select-the-Correct-Answer
Type-of-coverage-under-which-payment-is-made-
Details-of-the-accident-
Application-of-the-deductible-
Drivers-license-number---ans-✔✔Type-of-coverage-under-which-payment-is-made-is-
correct.
, EXPLANATION:
When-a-claim-payment-is-made,-an-indication-of-the-type-of-coverage-under-which-the-
payment-is-made-must-be-stated-on-the-draft-payment.
Under-the-Commercial-Property-Policy,-the-Pro-rata-Liability-Clause-means:
Answer-Choices:-Select-the-Correct-Answer
Each-insurer-pays-its-limits-under-the-policy.-
Neither-Insurer-Pays-
Each-insurer-pays-in-accordance-to-the-percentage-of-its-coverage-bears-to-the-total-
amount-of-insurance.-
A-Form-of-Coinsurance-Clause---ans-✔✔Each-insurer-pays-in-accordance-to-the-
percentage-of-its-coverage-bears-to-the-total-amount-of-insurance.-is-correct.
EXPLANATION:
The-insurer-will-not-be-liable-for-a-greater-proportion-of-a-loss-than-the-amount-insured-will-
bear-to-the-whole-insurance-covering-the-property-against-the-peril-involved,-whether-
collectible-or-not.-This-is-often-referred-to-as-the-"Other-Insurance"-clause.
David-has-damaged-his-vehicle-by-striking-a-tree.-He-can:
I.-Take-the-car-to-a-repair-garage-recommended-by-the-insurer.
II.-Take-the-car-to-a-garage-of-his-choice.
III.-Accept-payment-based-on-the-adjuster's-estimate.
Answer-Choices:-Select-the-Correct-Answer
I,-II-and-III-
I-and-II-only-
I-and-III-only-
I-only---ans-✔✔I,-II-and-III-is-correct.
EXPLANATION:
The-choice-belongs-to-the-David,-the-insured.
Under-a-farm-policy,-which-of-the-following-would-be-covered-under-Coverage-A?
Answer-Choices:-Select-the-Correct-Answer
A-structure-attached-to-the-dwelling-
A-structure-detached-from-the-dwelling-
Dwelling-Contents-
Livestock---ans-✔✔A-structure-attached-to-the-dwelling-is-correct.
EXPLANATION:
Coverage-A-covers-the-dwelling-and-any-attached-structures-such-as-a-garage.
Which-of-the-following-coverages-is-included-in-a-Personal-Auto-Policy-without-having-to-
issue-an-endorsement?
Answer-Choices:-Select-the-Correct-Answer
Transportation-Expenses-
Towing-and-Labor-Costs-
Miscellaneous-Type-Vehicles-
Named-Nonowner---ans-✔✔Transportation-Expenses.
EXPLANATION:
QUESTIONS AND ANSWERS
Other-structures-are-excluded-from-coverage-under-the-HO-3-when-they-are:
Smaller-than-100-square-feet-or-larger-than-1,000-square-feet-
Smaller-than-100-square-feet-or-larger-than-500-square-feet-
Used-for-storage-purposes-
Used-for-business-purposes---ans-✔✔Used-for-business-purposes-is-correct.
EXPLANATION:
When-the-other-structures-are-used-for-business-purposes-they-are-not-covered-under-
the-homeowner-form.-This-structure-and-its-contents-could-be-covered-under-a-
commercial-property-policy.-An-exception-would-be-a-detached-structure-used-to-store-
business-property-of-a-non-flammable,-non-gaseous-nature.
An-insurance-company-must-give-how-many-days-notice-of-cancellation-for-a-vacancy-of-
more-than-60-days,-when-the-government-has-ordered-demolition,-or-when-fixed-items-
are-being-removed-and-not-replaced?
5-
21-
10-
30---ans-✔✔5-is-correct.
EXPLANATION:
The-cancellation-changes-endorsement-is-the-"mandatory-endorsement"-referred-to-in-
the-question.-In-California,-the-endorsement-must-be-included-in-every-commercial-
property-policy.-It-allows-cancellation-by-the-insurer-with-5-days'-notice-for-several-
reasons:-vacancy-or-unoccupancy-for-60-or-more-days;-damages-from-a-prior-covered-
loss-haven't-been-started;-the-government-has-ordered-demolition-or-to-vacate;-fixed-
items-are-being-removed-and-not-replaced;-and,-utilities-are-shut-off-for-30-or-more-days,-
or-property-taxes-are-more-than-one-year-past-due.
Upon-request-made-by-the-consumer,-a-person-who-procures-an-investigative-consumer-
report-on-the-consumer-must-make-a-complete-and-accurate-disclosure-to-the-consumer-
of-the-nature-of-the-report-and-investigation-within:
In-writing-and-mailed-to-the-consumer-within-30-days-of-the-request.-
In-writing-and-mailed-to-the-consumer-within-15-days-of-the-request.-
In-writing-and-mailed-to-the-consumer-within-10-days-of-the-request.-
,In-writing-and-mailed-to-the-consumer-within-5-days-of-the-request.---ans-✔✔In-writing-
and-mailed-to-the-consumer-within-5-days-of-the-request..
EXPLANATION:
This-disclosure-must-be-made-in-writing-and-mailed-or-otherwise-delivered-to-the-
consumer-no-later-than-five-days-after-the-date-on-which-the-request-for-the-disclosure-
was-received-from-the-consumer.
The-insured-has-primary-bodily-injury-and-property-damage-liability-coverage-with-a-
$100,000-limit,-and-a-$1-million-umbrella-liability-policy-with-a-$5,000-self-insured-
retention-limit.-In-which-one-of-the-following-situations-would-the-insured's-umbrella-
liability-policy-typically-not-provide-defense-coverage?
Answer-Choices:-Select-the-Correct-Answer
Five-people-sued-the-insured-for-property-damage-arising-out-of-one-occurrence.-One-of-
the-cases-was-settled-out-of-court-for-$100,000.-
The-insured-was-sued-for-$150,000-in-personal-injury-damages.-
The-insured-was-sued-for-$10,000-in-bodily-injury-damages.-
The-umbrella-liability-policy-would-provide-a-defense-in-all-three-cases.---ans-✔✔The-
correct-answer-is:-The-insured-was-sued-for-$10,000-in-bodily-injury-damages.-
EXPLANATION:
The-claim-would-fall-under-the-underlying-coverage-and-not-the-umbrella-because-the-
underlying-coverage-has-sufficient-limits-in-place.
Question-5-of-100
The-BAP-liability-exclusion-pertaining-to-pollution-removes-coverage-for-each-of-the-
following,-except:
Answer-Choices:-Select-the-Correct-Answer
The-cost-of-governmentally-ordered-clean-up-of-pollutants.-
The-escape-of-pollutants-while-being-transported-by-a-covered-auto.-
The-escape-of-pollutants-caused-by-damage-to-the-property-containing-them-when-the-
damage-results-from-the-use-of-a-covered-auto.-
The-escape-of-pollutants-before-they-are-accepted-by-the-insured-for-movement-onto-a-
covered-auto.---ans-✔✔The-escape-of-pollutants-caused-by-damage-to-the-property-
containing-them-when-the-damage-results-from-the-use-of-a-covered-auto.-is-correct.
EXPLANATION:
If-the-insured's-vehicle-causes-an-accident-with-another-vehicle-or-other-property-(owned-
by-a-third-party)-containing-the-pollutants,-the-loss-is-covered.
Which-of-the-following-would-not-be-covered-under-the-specified-cause-of-loss-physical-
damage-coverage-under-the-commercial-auto-form?
Glass-breakage-
Fire-
Lightning-
Flood---ans-✔✔The-correct-answer-is:-Glass-breakage.
,EXPLANATION:
The-specified-cause-of-loss-form-covers-the-following-perils:-fire,-lighting,-explosion,-theft,-
windstorm,-hail,-earthquake,-flood,-vandalism-or-mischief,-transportation-by-a-
conveyance.-The-coverage-does-not-include-glass-breakage,-hitting-a-bird-or-animal-nor-
falling-objects-or-missiles.
All-of-the-following-events-are-considered-acts-of-terrorism,-EXCEPT:
Acts-of-riot-and-civil-commotion.-
Acts-considered-dangerous-to-human-life,-property-or-infrastructure.-
Acts-resulting-in-damage-within-or-outside-the-United-States.-
Acts-at-the-premises-of-any-United-States-mission.---ans-✔✔The-correct-answer-is:-Acts-
of-riot-and-civil-commotion.-.
EXPLANATION:
Acts-of-riot-and-civil-commotion-are-not-covered-by-the-Act.-These-are-perils-that-are-
covered-by-property-insurance-policies.
A-company-or-staff-adjuster-represents-the-interests-of:
The-insurer.-
The-insured.-
The-claimant.-
The-public.---ans-✔✔The-insurer.-is-correct.
EXPLANATION:
Company-or-staff-adjusters-are-individuals-employed-by-a-property-and-casualty-
insurance-company-to-settle-on-its-behalf-claims-brought-by-insureds.-They-work-directly-
for-the-insurance-company-as-year-round-salaried-employees.-Staff-adjusters-evaluate-
the-merits-of-each-claim-and-make-recommendations-to-the-insurance-company.
Under-the-Personal-Auto-Policy-the-Supplementary-Payments-coverage-is:
Answer-Choices:-Select-the-Correct-Answer
In-addition-to-the-limit-of-liability.-
Added-by-endorsement.-
Included-in-the-limit-of-liability.-
Not-available-under-the-personal-auto-policy.---ans-✔✔In-addition-to-the-limit-of-liability.-is-
correct.
EXPLANATION:
Supplementary-Payments-are-in-addition-to-the-Limits-of-Liability.
When-a-first-party-claim-is-made,-what-must-be-listed-on-the-payment-draft?
Answer-Choices:-Select-the-Correct-Answer
Type-of-coverage-under-which-payment-is-made-
Details-of-the-accident-
Application-of-the-deductible-
Drivers-license-number---ans-✔✔Type-of-coverage-under-which-payment-is-made-is-
correct.
, EXPLANATION:
When-a-claim-payment-is-made,-an-indication-of-the-type-of-coverage-under-which-the-
payment-is-made-must-be-stated-on-the-draft-payment.
Under-the-Commercial-Property-Policy,-the-Pro-rata-Liability-Clause-means:
Answer-Choices:-Select-the-Correct-Answer
Each-insurer-pays-its-limits-under-the-policy.-
Neither-Insurer-Pays-
Each-insurer-pays-in-accordance-to-the-percentage-of-its-coverage-bears-to-the-total-
amount-of-insurance.-
A-Form-of-Coinsurance-Clause---ans-✔✔Each-insurer-pays-in-accordance-to-the-
percentage-of-its-coverage-bears-to-the-total-amount-of-insurance.-is-correct.
EXPLANATION:
The-insurer-will-not-be-liable-for-a-greater-proportion-of-a-loss-than-the-amount-insured-will-
bear-to-the-whole-insurance-covering-the-property-against-the-peril-involved,-whether-
collectible-or-not.-This-is-often-referred-to-as-the-"Other-Insurance"-clause.
David-has-damaged-his-vehicle-by-striking-a-tree.-He-can:
I.-Take-the-car-to-a-repair-garage-recommended-by-the-insurer.
II.-Take-the-car-to-a-garage-of-his-choice.
III.-Accept-payment-based-on-the-adjuster's-estimate.
Answer-Choices:-Select-the-Correct-Answer
I,-II-and-III-
I-and-II-only-
I-and-III-only-
I-only---ans-✔✔I,-II-and-III-is-correct.
EXPLANATION:
The-choice-belongs-to-the-David,-the-insured.
Under-a-farm-policy,-which-of-the-following-would-be-covered-under-Coverage-A?
Answer-Choices:-Select-the-Correct-Answer
A-structure-attached-to-the-dwelling-
A-structure-detached-from-the-dwelling-
Dwelling-Contents-
Livestock---ans-✔✔A-structure-attached-to-the-dwelling-is-correct.
EXPLANATION:
Coverage-A-covers-the-dwelling-and-any-attached-structures-such-as-a-garage.
Which-of-the-following-coverages-is-included-in-a-Personal-Auto-Policy-without-having-to-
issue-an-endorsement?
Answer-Choices:-Select-the-Correct-Answer
Transportation-Expenses-
Towing-and-Labor-Costs-
Miscellaneous-Type-Vehicles-
Named-Nonowner---ans-✔✔Transportation-Expenses.
EXPLANATION:
