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CA ADJUSTERS LICENSE PSI REVIEW EXAM
QUESTIONS AND ANSWERS LATEST A+ GRADED
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 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 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. 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.
Glass breakage Fire Lightning Flood 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. 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. 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. 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
I And II Only I And III Only I Only 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 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 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. 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.
Apparent Authority. EXPLANATION: Apparent Authority Is The Authority The Public Believes The Agent Has Which Seems To Be Apparent By The Agent's Actions. In Legal Terms, The Written Explanation Of How A Loss Occurred Is Called A: Answer Choices: Select The Correct Answer Loss Notification. Deposition. Statement. Proof Of Loss. Statement. Is Correct. EXPLANATION: This Is A Statement. A Proof Of Loss Lists The Damage For Which The Insured Desires Reimbursement. Under Workers Compensation Rules, For An Employee To Receive Temporary Disability Compensation For The First Three (3) Days Of His Disability, His Disability Period Must Extend: Answer Choices: Select The Correct Answer 21 Days 30 Days 45 Days 60 Days 21 Days Is Correct. EXPLANATION:
Benefits Are Retroactive To The Day Of The Injury If The Disability Lasts 21 Days. Under The Conditions Section Of The BOP, Which Of The Following Would Not Be Considered Vacant? Answer Choices: Select The Correct Answer A 100 Unit Apartment Building Of Which 70 Units Are Not Rented An Office Building Containing Two Empty Units And These Two Empty Suites Represent 25% Of The Total Floor Space. A Mercantile Building With A Print Shop On The Ground Floor But The Second And Third Floors Are Not Being Utilized A New Building Which Has Not Been Rented Out At All An Office Building Containing Two Empty Units And These Two Empty Suites Represent 25% Of The Total Floor Space. Is Correct. EXPLANATION: A Building Is Considered Vacant When 65% Or More Of The Total Floor Space Is Not Being Utilized Or Rented Out. The Office Building With Two Empty Suites Is Only 25% Vacant. A Ship Has Negligently Collided With Another Ship And Caused Severe Damage. What Coverage Would Apply To Cover This Claim? Answer Choices: Select The Correct Answer Hull Insurance With The "Running Down Clause". Protection And Indemnity. Inchmaree Clause. Towage Clause. Hull Insurance With The "Running Down Clause". Is Correct. EXPLANATION:
All The Following Are Reasons That A Driver Would Be Insured Under The Assigned Risk Plan, EXCEPT: Answer Choices: Select The Correct Answer They Desire To Save Premium They Are Uninsurable In The Standard Markets They Have Had Too Many Claims They Cannot Show Evidence Of Satisfying The Financial Responsibility Law Of The State They Desire To Save Premium Is Correct. EXPLANATION: Those Drivers With A Poor Driving Records Or DUI Charges Are Usually Declined By The Standard Insurance Markets. The Only Auto Insurance Market For Them Is The Assigned Risk Plan. The Plan Is Never Used To Save Premium. All The Following Are Included In The Definition Of Insolvency, EXCEPT: Answer Choices: Select The Correct Answer Impairment Of Minimum "Paid-In Capital" Required In The Aggregate Of An Insurer. The Inability Of The Insurer To Meet Its Financial Obligations When They Are Due. The Revocation Of An Insurer's Certificate Of Authority. The Inability Of The Insurer To Fully Reinsure All Outstanding Risks. The Revocation Of An Insurer's Certificate Of Authority. Is Correct. EXPLANATION: According To The California Insurance Code (CIC 985), Revocation Of An Insurer's Certificate Of Authority Is Not Included In The Definition Of Insolvency. A Method Of Replacing Damaged Property With Something Not Exactly Like The Damaged Item, But Will Perform The Same Is Known As:
Answer Choices: Select The Correct Answer Agreed Replacement Value. Stated Amount Value. Functional Replacement Cost. Replacement Cost. The Correct Answer Is: Functional Replacement Cost.. EXPLANATION: Functional Replacement Cost Will Replace The Damaged Item, But With Something That Might Not Be Exactly The Same. Ocean Marine Protection And Indemnity (P&I) Coverage Usually Insures The Ship Owner Against Liability For All Of The Following EXCEPT: Answer Choices: Select The Correct Answer Damage To Or Loss Of Another Ship Caused By A Negligent Collision. Injuries To Seamen Cargo Lost Or Damaged Through Negligence. Damage To Piers. Damage To Or Loss Of Another Ship Caused By A Negligent Collision. Is Correct. EXPLANATION: Hull Coverage Is Required To Cover The Damage To The Ship. P&I Provides Legal Liability Coverage For Injuries And Certain Types Of Damages. Damage To Another Ship Is Not Covered Under The P&I Coverage. Coverage Can Be Provided Under The Hull Coverage Form For This Coverage To Other Vessels. This Is Called The "Running Down Clause". The Insured Carries A BOP Policy With A Sprinkler System. If The System Becomes Inoperative The Insured Must Advise The Insurance Company Of The Problem Within ______ If The System Cannot Be Restored.
Answer Choices: Select The Correct Answer Specifies How A Claim Would Be Allocated Among The Different Insurers. Allow The Insured To Choose The Company That Will Pay The Claim. Provide For Subrogation Of A Claim. Avoid Overpayment Of A Claim. Specifies How A Claim Would Be Allocated Among The Different Insurers. Is Correct. EXPLANATION: The Purpose Of The Clause Is To Specify How A Claim Would Be Allocated Among The Different Insurers. A Large Tree Has Fallen Into Paul's Yard Caused By Wind. The Claims Service Representative Advises Paul To Call A Contractor To Remove The Tree And Send The Insurance Company The Bill. The Bill Is $1,200. However, The Policy Coverage For The Debris Removal Of A Tree That Has Fallen By Wind Is Only $500 Unless The Tree Hits The House, Which Was Not The Case. What Should The Adjuster Do? Answer Choices: Select The Correct Answer Pay Only $ Pay The $1, Explain The Policy Provisions And Ask To Insured To Reimburse The Insurer For The Difference Negotiate Pay The $1,200 Is Correct. EXPLANATION: The Consumer Relied On The Statements Of The Claims Representative So The Insurance Company Would Be Estopped From Denying The Claim. The Insurer Had Already Waived Its Right To Deny Full Payment Of The Claim Because Of The Statements Of The Claims Representative. Therefore, The $1,200 Should Be Paid.
Under The Commercial General Liability Policy, Medical Payment Expenses Must Be: Answer Choices: Select The Correct Answer Reported Within One Year Of The Accident. Paid Within One Year Of The Accident. Reported Within Two Year Of The Accident. Paid Within Three Years Of The Accident Reported Within One Year Of The Accident. Is Correct. EXPLANATION: It Is Required In The Policy That The Expenses Are Incurred And Reported To The Insurer Within One (1) Year Of The Date Of The Accident. Which Of The Following Perils Are Covered Under Section I Of The Homeowners Form? Answer Choices: Select The Correct Answer Physical Injury To A Guest Hurt On The Residence Premises First Aid Expenses Theft Of Credit Or Funds Transfer Cards Intentional Damage To The Property Of Others The Correct Answer Is: Theft Of Credit Or Funds Transfer Cards. EXPLANATION: Section I Coverages Are The Property Coverages. Section II Provides Liability And Medical Payments Coverage. The Theft Of The Credit Or Funds Transfer Cards Are Covered Property Up To A Limit Of $500. John Smith Has Just Made His Last Car Payment Which Concludes His Contract. The Finance Company, For Reasons Not Immediately Apparent, Has The Car Repossessed. If Mr. Smith Brings A Suit, The Court Will Allow Mr. Smith To Retake Possession Of The
Prevention Of Loss Protection From Loss To Provide Extra Coverage Over The Property Policy To Reinforce The Explosion And Fire Perils The Correct Answer Is: Prevention Of Loss. EXPLANATION: The Main Focus Of This Coverage Is To Prevent Loss Rather Then Protection From Loss. Proper Maintenance Of The Equipment Is Required And Inspections Will Be Performed To Help Prevent Losses. How Are Crop Insurance Premiums Calculated? Answer Choices: Select The Correct Answer Number Of Fields Number Of Crops Number Of Acres Per Farm Number Of Acres Is Correct. EXPLANATION: Crop Insurance Is Based On Acreage For Each Crop. Which Of The Following Is Not An Implied Warranty Under An Ocean Marine Policy? Answer Choices: Select The Correct Answer Seaworthiness Of The Vessel Legality No Deviation In The Voyage Protection And Indemnity
Protection And Indemnity Is Correct. EXPLANATION: Protection And Indemnity Is A Form Of Ocean Marine Liability Coverage And Is Not An Implied Warranty. In California A Lawsuit For Bodily Injury Must Be Brought Within: Answer Choices: Select The Correct Answer Five Years From The Date Of The Loss 180 Days From The Date Of The Loss Two Years From The Date Of The Loss Three Years From The Date Of The Loss Two Years From The Date Of The Loss Is Correct. EXPLANATION: The Lawsuit Must Be Brought Within Two Years Of The Date Of The Loss. A Business Owner Who Is Careless About Property Left In His Care May Be Guilty Of Which Of The Following Hazards: Answer Choices: Select The Correct Answer Morale. Moral. Catastrophic. Occupational. Morale. Is Correct. EXPLANATION:
