CA ADJUSTERS LICENSE PSI EXAM QUESTIONS

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CA ADJUSTERS LICENSE PSI EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -100 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation

Question 1: Which of the following is covered by a flood policy?

Answer Choices: Select the Correct Answer

Overflow of inland or tidal water Vehicles A broken water main Livestock

Answer:

Overflow of inland or tidal water is correct.

EXPLANATION:

Overflow of inland or tidal water is the prime coverage under flood insurance. Mudflow is also covered.Mudslides are not. The coverage does not include damage or loss of livestock or roads.

Question 2: For how long must an adjusting firm maintain its claim files?

Answer Choices: Select the Correct Answer

For as long as any statute of limitations For the current year and 10 prior years For the current year and 4 prior years For the current year only

Answer:

For the current year and 4 prior years is correct.

EXPLANATION:

Per the California DOI, adjusting firms must maintain files for the current policy year and the preceding four years, at the company's principal place of business.

Question 3: Which of the following are additional coverages under a Businessowners policy with the named peril form attached?

• Debris removal.

II. Pollutant cleanup and removal.III. Exterior glass.IV. Collapse.

Answer Choices: Select the Correct Answer

I, II, and III only I and II only III and IV only I, II, III and IV

Answer:

I, II, and III only is correct.

EXPLANATION:

All are additional coverages, but collapse and water or other liquid, powder or molten materials are available only under the BOP Special form. The named peril form endorsement which coverts open peril coverage to named peril coverage does not include collapse as an additional coverage.

Question 4: Which commercial property form provides the broadest coverage?

Answer Choices: Select the Correct Answer

Basic form Broad form Special form Deluxe form

Answer:

Special form is correct.

EXPLANATION:

In commercial property insurance, the insured selects from three different "causes of loss" forms - basic, broad, or special. There is no deluxe form. Basic and broad forms provide named peril protection; special form is all-risk (open-perils), and is therefore the broadest.Question 5: The phrase "doctrine of subrogation" means:

Answer Choices: Select the Correct Answer

The policy allows the insurer to subrogate at its discretion Explains the types of claims for which subrogation interests may arise Explains that an insurance company must only subrogate when it so chooses and then must have the insured's written authority to do so Having paid an insured, the insuer is entitled to seek recovery from the responsible party via an assignment from the insured

Answer:

The correct answer is: Having paid an insured, the insuer is entitled to seek recovery from the responsible party via an assignment from the insured.

EXPLANATION:

The insured grants to the insurer permission to recover from the responsible third party reimbursement for any monies the insurer has paid out on the insured's behalf.Question 6: Dwelling forms may be used to insure residential structures which:

Answer Choices: Select the Correct Answer

Contain no more than 4 occupancy units.Have no more than 8 apartments.Are used as residences and for small retail sales operations.Are located on farms if no other business is conducted there.

Answer:

Contain no more than 4 occupancy units. is correct.

EXPLANATION:

This will vary to some extent by state. The industry standard is no more than 4 occupancy units.Question 7: 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 Question 8: 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

Answer:

Protection and indemnity is correct.

EXPLANATION:

Protection and indemnity is a form of ocean marine liability coverage and is not an implied warranty.

Question 9: The "when more than one coverage applies" condition in crime insurance is

designed to:

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.

Answer:

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.Question 10: Which of the following is considered an insured under the HO-5 form?

Answer Choices: Select the Correct Answer

You and residents of your household who are relatives Other persons under age 21 in the care of you or relatives residing with you A college student who is 24 or younger, is your relative and lived with your prior to college All of the responses are correct

Answer:

All of the responses are correct is correct.

EXPLANATION:

Though typically "insured" refers to the policyholder and his or her spouse, relatives by blood, marriage or adoption who reside in the named insured's household are also covered. Also included are wards or foster children under the age of 21 as well as resident relatives who are attending college away from home and are under 24 years of age.Question 11: A Private Passenger Auto Policy may be canceled after the effective date for which of the following reasons?Drivers license suspension of the insured.A change in the insured's occupation.The addition of a teenage driver to the policy.A change in the insured's marital status.

Answer:

Your answer: Drivers license suspension of the insured. is correct.

EXPLANATION:

Most states have enacted laws that restrict the insurer's ability to cancel, restrict or non-renew coverage.Certainly suspension of a driver's license is a justified reason.