CA ADJUSTERS LICENSE PSI QUESTIONS &
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 - Answers-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 - Answers-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. - Answers-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. - Answers-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. - Answers-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 - Answers-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. - Answers-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.
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 - Answers-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 - Answers-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 - Answers-Transportation Expenses.
EXPLANATION:
Transportation expenses are part of the Physical Damage coverage. Some auto policies
still provide this coverage only if the vehicle has been stolen.
, Basic benefits available under a typical workers compensation policy include which of
the following?
I. Medical expenses.
II. Loss of income.
III. Rehabilitation.
IV. Pain and suffering.
Answer Choices: Select the Correct Answer
I, II, and III only.
I and II only.
I, III, and IV only.
I, II, III and IV. - Answers-I, II, and III only. is correct.
EXPLANATION:
Workers compensation indemnifies an injured or ill worker for direct expenses resulting
from the cause with rehabilitation provided to encourage a worker to return to
productivity.
Which of the following is NOT included in the California Code of Regulations (CCR)?
Answer Choices: Select the Correct Answer
Selling techniques.
Specific requirements for different types of insurance.
Procedural issues related to agent and insurance company practices.
Conduct hearings and investigations. - Answers-The correct answer is: Selling
techniques. .
EXPLANATION:
Selling techniques are not issues for the California Department of Insurance unless the
techniques violate insurance law.
A company or staff adjuster represents the interests of:
The insurer.
The insured.
The claimant.
The public. - Answers-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.
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 - Answers-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 - Answers-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. - Answers-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. - Answers-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. - Answers-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 - Answers-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. - Answers-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.
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 - Answers-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 - Answers-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 - Answers-Transportation Expenses.
EXPLANATION:
Transportation expenses are part of the Physical Damage coverage. Some auto policies
still provide this coverage only if the vehicle has been stolen.
, Basic benefits available under a typical workers compensation policy include which of
the following?
I. Medical expenses.
II. Loss of income.
III. Rehabilitation.
IV. Pain and suffering.
Answer Choices: Select the Correct Answer
I, II, and III only.
I and II only.
I, III, and IV only.
I, II, III and IV. - Answers-I, II, and III only. is correct.
EXPLANATION:
Workers compensation indemnifies an injured or ill worker for direct expenses resulting
from the cause with rehabilitation provided to encourage a worker to return to
productivity.
Which of the following is NOT included in the California Code of Regulations (CCR)?
Answer Choices: Select the Correct Answer
Selling techniques.
Specific requirements for different types of insurance.
Procedural issues related to agent and insurance company practices.
Conduct hearings and investigations. - Answers-The correct answer is: Selling
techniques. .
EXPLANATION:
Selling techniques are not issues for the California Department of Insurance unless the
techniques violate insurance law.
A company or staff adjuster represents the interests of:
The insurer.
The insured.
The claimant.
The public. - Answers-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.
