California Independent Adjuster Exam Prep FREE Sample Exam

Which statement best describes a public-facing distinction between a staff adjuster and an independent adjuster?

A staff adjuster works only for insureds and never for insurers

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Both are always paid a percentage of the claim they deny

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An independent adjuster needs no license anywhere

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A staff adjuster is a salaried employee of an insurer, while an independent adjuster is engaged by insurers on assignment as an independent contractor or firm

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Why do regulators and insurers emphasize accurate, complete claim files in fraud control?

A thick file automatically proves a claim is fraudulent

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Files are kept mainly as advertising material for new customers

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Complete files eliminate the need for any investigation

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Documented files support coverage decisions, recovery actions, audits, and any fraud referral built on the claim

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A lender is named on a Sacramento cabin policy. If the cabin is destroyed by a covered fire, the lender’s insurable interest is best measured by:

The outstanding loan balance secured by the cabin

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The borrower's total net worth

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The full replacement cost in all cases regardless of debt

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The amount of the borrower's life insurance

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A Los Angeles bakery has a covered equipment loss of $12,000 stated in the stem, and its policy carries a $1,000 deductible stated in the stem. Ignoring any other terms, the insurer’s payment is:

$13,000

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$1,000

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$11,000

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$12,000

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A condition that requires the insured to protect property from further damage after a loss is an example of:

A declaration that sets the policy limit

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A definition of an insured location

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An exclusion that removes the original loss from coverage

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A post-loss duty imposed on the insured by the policy conditions

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What is the practical difference between a misrepresentation and a breach of warranty for coverage?

There is no difference; the terms are fully interchangeable

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A warranty never affects coverage under any circumstances

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Misrepresentation can only occur after a loss happens

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A misrepresentation generally must be material to affect coverage, while a warranty is a strict condition of the contract

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Adjuster Luis is inspecting a Stockton warehouse after a severe storm roof leak. He notes stacks of cardboard stored directly against a space heater. How should he classify that storage practice?

A peril that has already caused a covered loss

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An example of risk avoidance by the insured

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Speculative risk that could produce a gain

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A physical hazard that increases the chance of fire loss

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Salvage in property claims refers to:

The insured's right to abandon a claim at any time

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A fee paid to the adjuster for closing a file

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The damaged property or its remaining value, which the insurer may take or credit when it pays for a total loss

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The process of appealing a claim denial

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All of the following are characteristics of an insurance contract EXCEPT:

It is a bilateral contract in which both parties' promises are equally enforceable from the start

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It is conditional on the insured meeting policy conditions

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It is aleatory, depending on an uncertain event

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It is a contract of utmost good faith

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A fraternal benefit society provides insurance benefits primarily to:

Any member of the general public who walks in

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Employees of the state insurance department

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Only stockholders who buy shares

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Its members, who belong to the society's lodge or membership system

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A Redding business cancels its one-year policy at its own request exactly halfway through the term. The annual premium was $2,000 and the short-rate table in this question refunds 40% of the annual premium at that point. The refund is:

$400

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$1,000

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$2,000

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$800

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Which loss is a Broad-form peril but not a Basic-form peril?

Collapse caused by the weight of ice accumulating on a roof in Sacramento

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A volcanic eruption that damages a building

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Lightning that damages electrical equipment in Stockton

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A fire that starts in a kitchen in Redding

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California Independent Adjuster Exam Prep FREE Sample Exam — Fixed Set

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