CALIFORNIA ADJUSTER PSI FINAL PAPER
2026 COMPLETE QUESTION SET VERIFIED
DETAILED SOLUTIONS PROFESSIONAL
LICENSING PREPARATION GUIDE
GRADED A+
⩥ 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. Answer: 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..
Answer: 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..
Answer: 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.. Answer: 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. Answer: 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:
2026 COMPLETE QUESTION SET VERIFIED
DETAILED SOLUTIONS PROFESSIONAL
LICENSING PREPARATION GUIDE
GRADED A+
⩥ 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. Answer: 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..
Answer: 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..
Answer: 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.. Answer: 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. Answer: 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:
