CA ADJUSTERS LICENSE PSI EXAM
QUESTIONS WITH CORRECT ANSWERS
Other cstructures care cexcluded cfrom ccoverage cunder cthe cHO-3 cwhen cthey care:
Smaller cthan c100 csquare cfeet cor clarger cthan c1,000 csquare cfeet c
Smaller cthan c100 csquare cfeet cor clarger cthan c500 csquare cfeet c
Used cfor cstorage cpurposes c
Used cfor cbusiness cpurposes c- cCORRECT cANS✔✔Used cfor cbusiness cpurposes cis
ccorrect.
EXPLANATION:
When cthe cother cstructures care cused cfor cbusiness cpurposes cthey care cnot ccovered
cunder cthe chomeowner cform. cThis cstructure cand cits ccontents ccould cbe ccovered
cunder ca ccommercial cproperty cpolicy. cAn cexception cwould cbe ca cdetached cstructure
cused cto cstore cbusiness cproperty cof ca cnon-flammable, cnon-gaseous cnature.
An cinsurance ccompany cmust cgive chow cmany cdays cnotice cof ccancellation cfor ca
cvacancy cof cmore cthan c60 cdays, cwhen cthe cgovernment chas cordered cdemolition, cor
cwhen cfixed citems care cbeing cremoved cand cnot creplaced?
5c
21 c
10 c
30 c- cCORRECT cANS✔✔5 cis ccorrect.
EXPLANATION:
,The ccancellation cchanges cendorsement cis cthe c"mandatory cendorsement" creferred
cto cin cthe cquestion. cIn cCalifornia, cthe cendorsement cmust cbe cincluded cin cevery
ccommercial cproperty cpolicy. cIt callows ccancellation cby cthe cinsurer cwith c5 cdays'
cnotice cfor cseveral creasons: cvacancy cor cunoccupancy cfor c60 cor cmore cdays;
cdamages cfrom ca cprior ccovered closs chaven't cbeen cstarted; cthe cgovernment chas
cordered cdemolition cor cto cvacate; cfixed citems care cbeing cremoved cand cnot
creplaced; cand, cutilities care cshut coff cfor c30 cor cmore cdays, cor cproperty ctaxes care
cmore cthan cone cyear cpast cdue.
Upon crequest cmade cby cthe cconsumer, ca cperson cwho cprocures can cinvestigative
cconsumer creport con cthe cconsumer cmust cmake ca ccomplete cand caccurate
cdisclosure cto cthe cconsumer cof cthe cnature cof cthe creport cand cinvestigation cwithin:
In cwriting cand cmailed cto cthe cconsumer cwithin c30 cdays cof cthe crequest. c
In cwriting cand cmailed cto cthe cconsumer cwithin c15 cdays cof cthe crequest. c
In cwriting cand cmailed cto cthe cconsumer cwithin c10 cdays cof cthe crequest. c
In cwriting cand cmailed cto cthe cconsumer cwithin c5 cdays cof cthe crequest. c- cCORRECT
cANS✔✔In cwriting cand cmailed cto cthe cconsumer cwithin c5 cdays cof cthe crequest..
EXPLANATION:
This cdisclosure cmust cbe cmade cin cwriting cand cmailed cor cotherwise cdelivered cto cthe
cconsumer cno clater cthan cfive cdays cafter cthe cdate con cwhich cthe crequest cfor cthe
cdisclosure cwas creceived cfrom cthe cconsumer.
The cinsured chas cprimary cbodily cinjury cand cproperty cdamage cliability ccoverage cwith
ca c$100,000 climit, cand ca c$1 cmillion cumbrella cliability cpolicy cwith ca c$5,000 cself-
insured cretention climit. cIn cwhich cone cof cthe cfollowing csituations cwould cthe cinsured's
cumbrella cliability cpolicy ctypically cnot cprovide cdefense ccoverage?
Answer cChoices: cSelect cthe cCorrect cAnswer
Five cpeople csued cthe cinsured cfor cproperty cdamage carising cout cof cone coccurrence.
cOne cof cthe ccases cwas csettled cout cof ccourt cfor c$100,000. c
The cinsured cwas csued cfor c$150,000 cin cpersonal cinjury cdamages. c
The cinsured cwas csued cfor c$10,000 cin cbodily cinjury cdamages. c
The cumbrella cliability cpolicy cwould cprovide ca cdefense cin call cthree ccases. c-
cCORRECT cANS✔✔The ccorrect canswer cis: cThe cinsured cwas csued cfor c$10,000 cin
cbodily cinjury cdamages. c
EXPLANATION:
The cclaim cwould cfall cunder cthe cunderlying ccoverage cand cnot cthe cumbrella cbecause
cthe cunderlying ccoverage chas csufficient climits cin cplace.
Question c5 cof c100
The cBAP cliability cexclusion cpertaining cto cpollution cremoves ccoverage cfor ceach cof
cthe cfollowing, cexcept:
Answer cChoices: cSelect cthe cCorrect cAnswer
The ccost cof cgovernmentally cordered cclean-up cof cpollutants. c
,The cescape cof cpollutants cwhile cbeing ctransported cby ca ccovered cauto. c
The cescape cof cpollutants ccaused cby cdamage cto cthe cproperty ccontaining cthem
cwhen cthe cdamage cresults cfrom cthe cuse cof ca ccovered cauto. c
The cescape cof cpollutants cbefore cthey care caccepted cby cthe cinsured cfor cmovement
conto ca ccovered cauto. c- cCORRECT cANS✔✔The cescape cof cpollutants ccaused cby
cdamage cto cthe cproperty ccontaining cthem cwhen cthe cdamage cresults cfrom cthe cuse
cof ca ccovered cauto. cis ccorrect.
EXPLANATION:
If cthe cinsured's cvehicle ccauses can caccident cwith canother cvehicle cor cother cproperty
c(owned cby ca cthird cparty) ccontaining cthe cpollutants, cthe closs cis ccovered.
Which cof cthe cfollowing cwould cnot cbe ccovered cunder cthe cspecified ccause cof closs
cphysical cdamage ccoverage cunder cthe ccommercial cauto cform?
Glass cbreakage c
Fire c
Lightning c
Flood c- cCORRECT cANS✔✔The ccorrect canswer cis: cGlass cbreakage.
EXPLANATION:
The cspecified ccause cof closs cform ccovers cthe cfollowing cperils: cfire, clighting,
cexplosion, ctheft, cwindstorm, chail, cearthquake, cflood, cvandalism cor cmischief,
ctransportation cby ca cconveyance. cThe ccoverage cdoes cnot cinclude cglass cbreakage,
chitting ca cbird cor canimal cnor cfalling cobjects cor cmissiles.
All cof cthe cfollowing cevents care cconsidered cacts cof cterrorism, cEXCEPT:
Acts cof criot cand ccivil ccommotion. c
Acts cconsidered cdangerous cto chuman clife, cproperty cor cinfrastructure. c
Acts cresulting cin cdamage cwithin cor coutside cthe cUnited cStates. c
Acts cat cthe cpremises cof cany cUnited cStates cmission. c- cCORRECT cANS✔✔The
ccorrect canswer cis: cActs cof criot cand ccivil ccommotion. c.
EXPLANATION:
Acts cof criot cand ccivil ccommotion care cnot ccovered cby cthe cAct. cThese care cperils
cthat care ccovered cby cproperty cinsurance cpolicies.
A ccompany cor cstaff cadjuster crepresents cthe cinterests cof:
The cinsurer. c
The cinsured. c
The cclaimant. c
The cpublic. c- cCORRECT cANS✔✔The cinsurer. cis ccorrect.
EXPLANATION:
Company cor cstaff cadjusters care cindividuals cemployed cby ca cproperty cand ccasualty
cinsurance ccompany cto csettle con cits cbehalf cclaims cbrought cby cinsureds. cThey cwork
cdirectly cfor cthe cinsurance ccompany cas cyear-round csalaried cemployees. cStaff
, cadjusters cevaluate cthe cmerits cof ceach cclaim cand cmake crecommendations cto cthe
cinsurance ccompany.
Under cthe cPersonal cAuto cPolicy cthe cSupplementary cPayments ccoverage cis:
Answer cChoices: cSelect cthe cCorrect cAnswer
In caddition cto cthe climit cof cliability. c
Added cby cendorsement. c
Included cin cthe climit cof cliability. c
Not cavailable cunder cthe cpersonal cauto cpolicy. c- cCORRECT cANS✔✔In caddition cto
cthe climit cof cliability. cis ccorrect.
EXPLANATION:
Supplementary cPayments care cin caddition cto cthe cLimits cof cLiability.
When ca cfirst cparty cclaim cis cmade, cwhat cmust cbe clisted con cthe cpayment cdraft?
Answer cChoices: cSelect cthe cCorrect cAnswer
Type cof ccoverage cunder cwhich cpayment cis cmade c
Details cof cthe caccident c
Application cof cthe cdeductible c
Drivers clicense cnumber c- cCORRECT cANS✔✔Type cof ccoverage cunder cwhich
cpayment cis cmade cis ccorrect.
EXPLANATION:
When ca cclaim cpayment cis cmade, can cindication cof cthe ctype cof ccoverage cunder
cwhich cthe cpayment cis cmade cmust cbe cstated con cthe cdraft cpayment.
Under cthe cCommercial cProperty cPolicy, cthe cPro-rata cLiability cClause cmeans:
Answer cChoices: cSelect cthe cCorrect cAnswer
Each cinsurer cpays cits climits cunder cthe cpolicy. c
Neither cInsurer cPays c
Each cinsurer cpays cin caccordance cto cthe cpercentage cof cits ccoverage cbears cto cthe
ctotal camount cof cinsurance. c
A cForm cof cCoinsurance cClause c- cCORRECT cANS✔✔Each cinsurer cpays cin
caccordance cto cthe cpercentage cof cits ccoverage cbears cto cthe ctotal camount cof
cinsurance. cis ccorrect.
EXPLANATION:
The cinsurer cwill cnot cbe cliable cfor ca cgreater cproportion cof ca closs cthan cthe camount
cinsured cwill cbear cto cthe cwhole cinsurance ccovering cthe cproperty cagainst cthe cperil
cinvolved, cwhether ccollectible cor cnot. cThis cis coften creferred cto cas cthe c"Other
cInsurance" cclause.
David chas cdamaged chis cvehicle cby cstriking ca ctree. cHe ccan:
I. cTake cthe ccar cto ca crepair cgarage crecommended cby cthe cinsurer.
II. cTake cthe ccar cto ca cgarage cof chis cchoice.
III. cAccept cpayment cbased con cthe cadjuster's cestimate.
Answer cChoices: cSelect cthe cCorrect cAnswer
I, cII cand cIII c
I cand cII conly c
QUESTIONS WITH CORRECT ANSWERS
Other cstructures care cexcluded cfrom ccoverage cunder cthe cHO-3 cwhen cthey care:
Smaller cthan c100 csquare cfeet cor clarger cthan c1,000 csquare cfeet c
Smaller cthan c100 csquare cfeet cor clarger cthan c500 csquare cfeet c
Used cfor cstorage cpurposes c
Used cfor cbusiness cpurposes c- cCORRECT cANS✔✔Used cfor cbusiness cpurposes cis
ccorrect.
EXPLANATION:
When cthe cother cstructures care cused cfor cbusiness cpurposes cthey care cnot ccovered
cunder cthe chomeowner cform. cThis cstructure cand cits ccontents ccould cbe ccovered
cunder ca ccommercial cproperty cpolicy. cAn cexception cwould cbe ca cdetached cstructure
cused cto cstore cbusiness cproperty cof ca cnon-flammable, cnon-gaseous cnature.
An cinsurance ccompany cmust cgive chow cmany cdays cnotice cof ccancellation cfor ca
cvacancy cof cmore cthan c60 cdays, cwhen cthe cgovernment chas cordered cdemolition, cor
cwhen cfixed citems care cbeing cremoved cand cnot creplaced?
5c
21 c
10 c
30 c- cCORRECT cANS✔✔5 cis ccorrect.
EXPLANATION:
,The ccancellation cchanges cendorsement cis cthe c"mandatory cendorsement" creferred
cto cin cthe cquestion. cIn cCalifornia, cthe cendorsement cmust cbe cincluded cin cevery
ccommercial cproperty cpolicy. cIt callows ccancellation cby cthe cinsurer cwith c5 cdays'
cnotice cfor cseveral creasons: cvacancy cor cunoccupancy cfor c60 cor cmore cdays;
cdamages cfrom ca cprior ccovered closs chaven't cbeen cstarted; cthe cgovernment chas
cordered cdemolition cor cto cvacate; cfixed citems care cbeing cremoved cand cnot
creplaced; cand, cutilities care cshut coff cfor c30 cor cmore cdays, cor cproperty ctaxes care
cmore cthan cone cyear cpast cdue.
Upon crequest cmade cby cthe cconsumer, ca cperson cwho cprocures can cinvestigative
cconsumer creport con cthe cconsumer cmust cmake ca ccomplete cand caccurate
cdisclosure cto cthe cconsumer cof cthe cnature cof cthe creport cand cinvestigation cwithin:
In cwriting cand cmailed cto cthe cconsumer cwithin c30 cdays cof cthe crequest. c
In cwriting cand cmailed cto cthe cconsumer cwithin c15 cdays cof cthe crequest. c
In cwriting cand cmailed cto cthe cconsumer cwithin c10 cdays cof cthe crequest. c
In cwriting cand cmailed cto cthe cconsumer cwithin c5 cdays cof cthe crequest. c- cCORRECT
cANS✔✔In cwriting cand cmailed cto cthe cconsumer cwithin c5 cdays cof cthe crequest..
EXPLANATION:
This cdisclosure cmust cbe cmade cin cwriting cand cmailed cor cotherwise cdelivered cto cthe
cconsumer cno clater cthan cfive cdays cafter cthe cdate con cwhich cthe crequest cfor cthe
cdisclosure cwas creceived cfrom cthe cconsumer.
The cinsured chas cprimary cbodily cinjury cand cproperty cdamage cliability ccoverage cwith
ca c$100,000 climit, cand ca c$1 cmillion cumbrella cliability cpolicy cwith ca c$5,000 cself-
insured cretention climit. cIn cwhich cone cof cthe cfollowing csituations cwould cthe cinsured's
cumbrella cliability cpolicy ctypically cnot cprovide cdefense ccoverage?
Answer cChoices: cSelect cthe cCorrect cAnswer
Five cpeople csued cthe cinsured cfor cproperty cdamage carising cout cof cone coccurrence.
cOne cof cthe ccases cwas csettled cout cof ccourt cfor c$100,000. c
The cinsured cwas csued cfor c$150,000 cin cpersonal cinjury cdamages. c
The cinsured cwas csued cfor c$10,000 cin cbodily cinjury cdamages. c
The cumbrella cliability cpolicy cwould cprovide ca cdefense cin call cthree ccases. c-
cCORRECT cANS✔✔The ccorrect canswer cis: cThe cinsured cwas csued cfor c$10,000 cin
cbodily cinjury cdamages. c
EXPLANATION:
The cclaim cwould cfall cunder cthe cunderlying ccoverage cand cnot cthe cumbrella cbecause
cthe cunderlying ccoverage chas csufficient climits cin cplace.
Question c5 cof c100
The cBAP cliability cexclusion cpertaining cto cpollution cremoves ccoverage cfor ceach cof
cthe cfollowing, cexcept:
Answer cChoices: cSelect cthe cCorrect cAnswer
The ccost cof cgovernmentally cordered cclean-up cof cpollutants. c
,The cescape cof cpollutants cwhile cbeing ctransported cby ca ccovered cauto. c
The cescape cof cpollutants ccaused cby cdamage cto cthe cproperty ccontaining cthem
cwhen cthe cdamage cresults cfrom cthe cuse cof ca ccovered cauto. c
The cescape cof cpollutants cbefore cthey care caccepted cby cthe cinsured cfor cmovement
conto ca ccovered cauto. c- cCORRECT cANS✔✔The cescape cof cpollutants ccaused cby
cdamage cto cthe cproperty ccontaining cthem cwhen cthe cdamage cresults cfrom cthe cuse
cof ca ccovered cauto. cis ccorrect.
EXPLANATION:
If cthe cinsured's cvehicle ccauses can caccident cwith canother cvehicle cor cother cproperty
c(owned cby ca cthird cparty) ccontaining cthe cpollutants, cthe closs cis ccovered.
Which cof cthe cfollowing cwould cnot cbe ccovered cunder cthe cspecified ccause cof closs
cphysical cdamage ccoverage cunder cthe ccommercial cauto cform?
Glass cbreakage c
Fire c
Lightning c
Flood c- cCORRECT cANS✔✔The ccorrect canswer cis: cGlass cbreakage.
EXPLANATION:
The cspecified ccause cof closs cform ccovers cthe cfollowing cperils: cfire, clighting,
cexplosion, ctheft, cwindstorm, chail, cearthquake, cflood, cvandalism cor cmischief,
ctransportation cby ca cconveyance. cThe ccoverage cdoes cnot cinclude cglass cbreakage,
chitting ca cbird cor canimal cnor cfalling cobjects cor cmissiles.
All cof cthe cfollowing cevents care cconsidered cacts cof cterrorism, cEXCEPT:
Acts cof criot cand ccivil ccommotion. c
Acts cconsidered cdangerous cto chuman clife, cproperty cor cinfrastructure. c
Acts cresulting cin cdamage cwithin cor coutside cthe cUnited cStates. c
Acts cat cthe cpremises cof cany cUnited cStates cmission. c- cCORRECT cANS✔✔The
ccorrect canswer cis: cActs cof criot cand ccivil ccommotion. c.
EXPLANATION:
Acts cof criot cand ccivil ccommotion care cnot ccovered cby cthe cAct. cThese care cperils
cthat care ccovered cby cproperty cinsurance cpolicies.
A ccompany cor cstaff cadjuster crepresents cthe cinterests cof:
The cinsurer. c
The cinsured. c
The cclaimant. c
The cpublic. c- cCORRECT cANS✔✔The cinsurer. cis ccorrect.
EXPLANATION:
Company cor cstaff cadjusters care cindividuals cemployed cby ca cproperty cand ccasualty
cinsurance ccompany cto csettle con cits cbehalf cclaims cbrought cby cinsureds. cThey cwork
cdirectly cfor cthe cinsurance ccompany cas cyear-round csalaried cemployees. cStaff
, cadjusters cevaluate cthe cmerits cof ceach cclaim cand cmake crecommendations cto cthe
cinsurance ccompany.
Under cthe cPersonal cAuto cPolicy cthe cSupplementary cPayments ccoverage cis:
Answer cChoices: cSelect cthe cCorrect cAnswer
In caddition cto cthe climit cof cliability. c
Added cby cendorsement. c
Included cin cthe climit cof cliability. c
Not cavailable cunder cthe cpersonal cauto cpolicy. c- cCORRECT cANS✔✔In caddition cto
cthe climit cof cliability. cis ccorrect.
EXPLANATION:
Supplementary cPayments care cin caddition cto cthe cLimits cof cLiability.
When ca cfirst cparty cclaim cis cmade, cwhat cmust cbe clisted con cthe cpayment cdraft?
Answer cChoices: cSelect cthe cCorrect cAnswer
Type cof ccoverage cunder cwhich cpayment cis cmade c
Details cof cthe caccident c
Application cof cthe cdeductible c
Drivers clicense cnumber c- cCORRECT cANS✔✔Type cof ccoverage cunder cwhich
cpayment cis cmade cis ccorrect.
EXPLANATION:
When ca cclaim cpayment cis cmade, can cindication cof cthe ctype cof ccoverage cunder
cwhich cthe cpayment cis cmade cmust cbe cstated con cthe cdraft cpayment.
Under cthe cCommercial cProperty cPolicy, cthe cPro-rata cLiability cClause cmeans:
Answer cChoices: cSelect cthe cCorrect cAnswer
Each cinsurer cpays cits climits cunder cthe cpolicy. c
Neither cInsurer cPays c
Each cinsurer cpays cin caccordance cto cthe cpercentage cof cits ccoverage cbears cto cthe
ctotal camount cof cinsurance. c
A cForm cof cCoinsurance cClause c- cCORRECT cANS✔✔Each cinsurer cpays cin
caccordance cto cthe cpercentage cof cits ccoverage cbears cto cthe ctotal camount cof
cinsurance. cis ccorrect.
EXPLANATION:
The cinsurer cwill cnot cbe cliable cfor ca cgreater cproportion cof ca closs cthan cthe camount
cinsured cwill cbear cto cthe cwhole cinsurance ccovering cthe cproperty cagainst cthe cperil
cinvolved, cwhether ccollectible cor cnot. cThis cis coften creferred cto cas cthe c"Other
cInsurance" cclause.
David chas cdamaged chis cvehicle cby cstriking ca ctree. cHe ccan:
I. cTake cthe ccar cto ca crepair cgarage crecommended cby cthe cinsurer.
II. cTake cthe ccar cto ca cgarage cof chis cchoice.
III. cAccept cpayment cbased con cthe cadjuster's cestimate.
Answer cChoices: cSelect cthe cCorrect cAnswer
I, cII cand cIII c
I cand cII conly c
