CALIFORNIA ALL LINES ADJUSTER EXAM
BRAND NEW!! QUESTIONS AND CORRECT
ANSWERS) VERIFIED ANSWERS 2025
1. What is the primary purpose of subrogation?
o A) Transfer insurer’s rights to pursue a third party
o B) Transfer insured’s benefits
o C) Limit insurer’s liability
o D) Evaluate claim value
It allows the insurer to seek recovery from the party legally responsible
for the loss.
2. An insured fails to notify the insurer promptly of a loss. This is:
o A) A declaration breach
o B) A condition breach
o C) A warranty breach
o D) A policy extension
, Timely notice is a condition precedent for claim coverage.
o
3. The "insuring agreement" of a policy:
o A) Contains definitions
o B) Lists covered perils
o C) Specifies exclusions
o D) States insurer’s promise to pay
This section outlines what the insurer agrees to cover.
4. Under a standard homeowners policy, which is NOT typically covered?
o A) Fire damage
o B) Theft
o C) Flood
Flood damage requires separate flood insurance.
5. Replacement cost coverage means:
o A) No deduction for depreciation
You receive the cost to replace without depreciation applied.
o B) Payment based on market value
o C) Settlement on actual cash value
o D) Guaranteed new-for-old
6. A "friendly fire" is:
, o A) Arson
o B) A funeral pyre
o C) Explosion
o D) Contained, intended fire
Burning within a container as intended is insured.
7. What is the effect of the coinsurance clause?
o A) Sets sublimit
o B) Determines deductible
o C) Fixes depreciation
o D) Encourages full coverage valuation
Insures property to a set percentage to avoid penalty.
8. In liability claims, "legal liability" means:
o A) Moral responsibility
o B) Breach of contract
o C) Obligation under law
Insured must pay damages for which they are legally liable.
9. Actual cash value (ACV) equals:
o A) Replacement cost only
o B) Market value only
o C) Replacement cost minus depreciation
Normal depreciation reduces payout from replacement value.
, 10. The appraisal clause is used when:
o A) The insured disagrees with the deductible
o B) Claims are obviously fraudulent
o C) Insured and insurer disagree on loss amount
Each appoints an appraiser; third-party umpire resolves difference.
11. In auto policies, UM/UIM stands for:
o A) Unilateral Motion/Uninsured
o B) Uninsured/Underinsured Motorist
Protects against negligent drivers without or insufficient coverage.
o C) Unlimited/Mandatory
o D) Unilateral Misrepresentation
12. The term “vacancy” refers to:
o A) Unoccupied rooms
o B) Entire property unoccupied
Vacancy triggers coverage restrictions or exclusions.
13. A binder provides:
o A) Permanent coverage
o B) Warranty protection
o C) Temporary proof of insurance
Valid until policy is issued or binder expires.
14. Pro rata cancellation allows the insurer to:
BRAND NEW!! QUESTIONS AND CORRECT
ANSWERS) VERIFIED ANSWERS 2025
1. What is the primary purpose of subrogation?
o A) Transfer insurer’s rights to pursue a third party
o B) Transfer insured’s benefits
o C) Limit insurer’s liability
o D) Evaluate claim value
It allows the insurer to seek recovery from the party legally responsible
for the loss.
2. An insured fails to notify the insurer promptly of a loss. This is:
o A) A declaration breach
o B) A condition breach
o C) A warranty breach
o D) A policy extension
, Timely notice is a condition precedent for claim coverage.
o
3. The "insuring agreement" of a policy:
o A) Contains definitions
o B) Lists covered perils
o C) Specifies exclusions
o D) States insurer’s promise to pay
This section outlines what the insurer agrees to cover.
4. Under a standard homeowners policy, which is NOT typically covered?
o A) Fire damage
o B) Theft
o C) Flood
Flood damage requires separate flood insurance.
5. Replacement cost coverage means:
o A) No deduction for depreciation
You receive the cost to replace without depreciation applied.
o B) Payment based on market value
o C) Settlement on actual cash value
o D) Guaranteed new-for-old
6. A "friendly fire" is:
, o A) Arson
o B) A funeral pyre
o C) Explosion
o D) Contained, intended fire
Burning within a container as intended is insured.
7. What is the effect of the coinsurance clause?
o A) Sets sublimit
o B) Determines deductible
o C) Fixes depreciation
o D) Encourages full coverage valuation
Insures property to a set percentage to avoid penalty.
8. In liability claims, "legal liability" means:
o A) Moral responsibility
o B) Breach of contract
o C) Obligation under law
Insured must pay damages for which they are legally liable.
9. Actual cash value (ACV) equals:
o A) Replacement cost only
o B) Market value only
o C) Replacement cost minus depreciation
Normal depreciation reduces payout from replacement value.
, 10. The appraisal clause is used when:
o A) The insured disagrees with the deductible
o B) Claims are obviously fraudulent
o C) Insured and insurer disagree on loss amount
Each appoints an appraiser; third-party umpire resolves difference.
11. In auto policies, UM/UIM stands for:
o A) Unilateral Motion/Uninsured
o B) Uninsured/Underinsured Motorist
Protects against negligent drivers without or insufficient coverage.
o C) Unlimited/Mandatory
o D) Unilateral Misrepresentation
12. The term “vacancy” refers to:
o A) Unoccupied rooms
o B) Entire property unoccupied
Vacancy triggers coverage restrictions or exclusions.
13. A binder provides:
o A) Permanent coverage
o B) Warranty protection
o C) Temporary proof of insurance
Valid until policy is issued or binder expires.
14. Pro rata cancellation allows the insurer to:
