California Insurance Adjuster Practice Test

Correct answer: A. A claims representative employed exclusively and regularly by one insurer, handling only that insurer's claims

Section 14022(a)(1) exempts a person employed exclusively and regularly by one employer, in connection with that employer's affairs only, when an employer-employee relationship exists. That describes the typical insurer staff adjuster. Independent adjusters, contract adjusters and firms that investigate or adjust claims for insurers, or solicit adjustment business, for any consideration fit the Section 14021 definition of an insurance adjuster and must be licensed.

Reference: Cal. Ins. Code Sections 14021 and 14022(a)(1)

Correct answer: D. Two years, with each year equal to at least 2,000 compensated hours

Section 14025(c) requires at least two years of experience adjusting insurance claims, or the equivalent as determined by the Commissioner. Regulation 2691.4(b) defines one year as at least 2,000 hours of actual compensated work, backed by written certifications from employers, so the standard works out to about 4,000 hours. One year (2,000 hours) is only half of the requirement.

Reference: Cal. Ins. Code Section 14025(c); 10 CCR 2691.4(b)

Correct answer: A. Dana qualifies as its manager and the business operates under her active direction and control

Section 14029(a) requires the business to run under the active direction, control, charge or management of the licensee, if qualified, or of a person who has qualified to act as its manager by passing the licensing exam and meeting the Section 14025 qualifications. CDI requires only the qualified manager to pass. The $20,000 bond belongs to public adjusters, and Section 15029 bars holding both kinds of adjuster license.

Reference: Cal. Ins. Code Section 14029(a) and (b)

Correct answer: B. $2,000

Section 14050(a) requires a $2,000 surety bond, executed by a surety authorized in California and conditioned on the faithful and honest conduct of business, and Section 14053 allows a $2,000 cash or bank deposit instead. Section 14050(b) excuses adjusters who work under a qualified manager or firm that has filed a bond listing them. The $20,000 figure is the public adjuster bond.

Reference: Cal. Ins. Code Sections 14050 and 14053

Correct answer: B. August 18, 15 calendar days after he began adjusting

Section 14022.5(a) lets nonlicensed adjusters handle emergency claims if they work under a licensed adjuster or authorized insurer, are registered no later than 15 calendar days after they begin adjusting in California, and certify that they have read CDI's notice and disaster handbook. A registration lasts 180 days and may be extended in 180-day increments. An out-of-state license alone does not authorize adjusting in California.

Reference: Cal. Ins. Code Section 14022.5(a) and (c)

Correct answer: C. Prohibited, because it exceeds the 3% financial interest limit

Section 14039(c) bars a licensed adjuster from soliciting or accepting remuneration from, or having a financial interest exceeding 3% in, any salvage, repair or other firm that obtains business on a claim the adjuster has agreed to adjust. Disclosure does not cure the conflict, and pricing is irrelevant. Public adjusters face an even stricter rule: Section 15028(b) bars any financial interest in such a firm.

Reference: Cal. Ins. Code Section 14039(c)

Correct answer: D. 24 hours, including 3 hours of ethics

Section 14090.1(a) requires at least 24 hours of continuing education, 3 of them in ethics, reported with each biennial renewal. The rule does not apply to a licensee not licensed for one full year before the end of the biennium, a nonresident who met home state CE, or an adjuster also licensed as a property or casualty broker-agent who met that license's CE requirement.

Reference: Cal. Ins. Code Section 14090.1

Correct answer: C. March 31, 2028

Section 14090 says every adjuster license, branch office certificate and pocket card expires on the day two years after the last calendar day of the month in which the license was issued. The month of issue ends March 31, 2026, so the license expires March 31, 2028. An expired license can still be renewed within one year by paying a delinquency fee (Section 14091).

Reference: Cal. Ins. Code Sections 14090 and 14091

Correct answer: A. A passing score on the California insurance adjuster exam, which CDI verifies after he applies

California does not waive its exam for nonresident independent adjusters. CDI's filing rules, published through NIPR, require a passed California exam (verified after submission), an equivalent resident or designated home state adjuster license elsewhere and the $2,000 bond unless an exemption applies, and fingerprints may be required. Applicants cannot select California as their designated home state.

Reference: CDI nonresident adjuster filing requirements (NIPR, California Non-Resident Adjuster Licensing); Cal. Ins. Code Section 14050

Correct answer: D. By meeting the adjuster license requirements except the licensing exam and completing FCIC loss adjustment training

Section 14085(a) directs the Commissioner to issue a crop insurance adjuster license to a person who qualifies for an insurance adjuster license, except for the Section 14026 examination, and who has completed the loss adjustment training curriculum and competency testing required by the Federal Crop Insurance Corporation Standard Reinsurance Agreement. Only licensed crop insurance adjusters may adjust crop insurance claims.

Reference: Cal. Ins. Code Section 14085

Correct answer: C. A felony under the Insurance Adjuster Act

Section 14080 makes knowingly falsifying the fingerprints or photographs required by Section 14024(f) a felony. Any other violation of the Insurance Adjuster Act is a misdemeanor punishable by a fine of up to $500, up to one year in county jail, or both, which is why the misdemeanor answer is tempting but wrong for falsified fingerprints.

Reference: Cal. Ins. Code Section 14080

Correct answer: C. 15 calendar days

Section 2695.5(e) requires the insurer to act immediately, but in no event more than 15 calendar days after notice of claim, unless the notice is a notice of legal action. An oral acknowledgment must be noted and dated in the claim file, and an agent's failure to promptly pass the notice on is imputed to the insurer. Thirty days is the payment deadline after a claim is accepted.

Reference: 10 CCR 2695.5(e)

Correct answer: D. Monday, June 15, 2026

Section 2695.7(b) allows no more than 40 calendar days after proof of claim to accept or deny. Counting 40 days from May 4 lands on Saturday, June 13. Section 2695.2(b) counts weekends and holidays, but when the last day falls on a Saturday, Sunday or holiday, the period runs to the next day that is not one: Monday, June 15. June 3 is only 30 days.

Reference: 10 CCR 2695.2(b) and 2695.7(b)

Correct answer: A. Send written notice within the 40 days stating what it needs and why, then update him in writing every 30 days

Section 2695.7(c)(1) requires written notice of the need for more time within the 40-day period, naming the information the insurer needs and the continuing reasons it cannot decide. The notice must be repeated every 30 calendar days until a decision is made or legal action is served. A phone call does not meet a written requirement, and Section 2695.7(d) demands a thorough, fair investigation, not a denial to beat the clock.

Reference: 10 CCR 2695.7(c)(1) and (d)

Correct answer: B. Immediately, but in no event more than 30 calendar days later

Section 2695.7(h) requires the insurer to tender the accepted amount immediately, and in no event more than 30 calendar days after acceptance, even if other items remain in dispute. The 60-day payment clause in the Section 2071 fire policy does not extend this, because Section 2695.1(f) requires policy provisions to be consistent with or more favorable to the insured than the regulations.

Reference: 10 CCR 2695.7(h) and 2695.1(f); Cal. Ins. Code Section 2071

Correct answer: A. 15 calendar days to the claimant and 21 calendar days to the Department

Section 2695.5(b) requires a complete response within 15 calendar days to any claimant communication that reasonably suggests a reply is expected, unless the claimant has served notice of legal action. Section 2695.5(a) gives the insurer 21 calendar days to send the Department a complete written response that addresses every issue raised and includes any documents and claim files requested.

Reference: 10 CCR 2695.5(a) and (b)

Correct answer: D. The exclusion relied on, how it applies, and notice that CDI can review the denial

For a first party denial, Section 2695.7(b)(1) requires a written statement of every basis for the denial and, when it rests on a policy provision or exclusion, a reference to it and an explanation of how it applies to the claim. Section 2695.7(b)(3) adds a statement that the claimant may have the matter reviewed by the Department of Insurance, with the unit's address and telephone number.

Reference: 10 CCR 2695.7(b)(1) and (b)(3)

Correct answer: D. 60 days

Section 2695.7(f) requires written notice of any statute of limitations or other time limit the insurer may rely on at least 60 days before it expires, or immediately if notice of claim first arrives within that window. For a first party uninsured motorist claim the lead time is 30 days, and the rule does not apply when the claimant has counsel. Misleading a claimant about a limitations period also violates Section 790.03(h)(15).

Reference: 10 CCR 2695.7(f); Cal. Ins. Code Section 790.03(h)(15)

Correct answer: A. Directly advising a claimant not to hire an attorney

Section 790.03(h)(14) lists directly advising a claimant not to obtain the services of an attorney. The 16 practices in Section 790.03(h) are violations when knowingly committed, even on a single occasion, or performed often enough to indicate a general business practice (10 CCR 2695.1(a)). Recorded statements, inspections and reasonable requests for documentation are normal parts of an investigation.

Reference: Cal. Ins. Code Section 790.03(h)(14); 10 CCR 2695.1(a)

Correct answer: C. $30,000

Section 790.035(a) sets a civil penalty of up to $5,000 per act, or up to $10,000 per act if the act was willful. Three willful acts can therefore cost up to three times $10,000, or $30,000. The $15,000 answer applies the non-willful maximum. The Commissioner decides what counts as an act and weighs factors such as the harm caused and any remedial measures (10 CCR 2695.12).

Reference: Cal. Ins. Code Section 790.035(a); 10 CCR 2695.12

Correct answer: D. A certification under penalty of perjury that she was trained on, or read and understands, the regulations is due by September 1

Section 2695.6(b)(3) requires an insurer that retains independent adjusters to train them on the regulations and certify annually, under penalty of perjury, that it did so. Alternatively, the adjuster may certify each year under penalty of perjury that she has read and understands the regulations or completed a training seminar. Section 2695.6(b)(5) sets a September 1 deadline. The 24 hours is biennial license CE.

Reference: 10 CCR 2695.6(b)(3) and (b)(5)

Correct answer: C. 35 calendar days

Section 2695.8(c) requires the insurer to tell the insured that if, within 35 calendar days after receiving the payment or final offer, the insured cannot buy a comparable automobile for the gross settlement amount, it will reopen the file. It must then locate a comparable car for that amount, pay the difference on one the insured found, or invoke appraisal, unless it already identified a specific available comparable vehicle.

Reference: 10 CCR 2695.8(c)

Correct answer: B. Unreasonable, because the limit in areas of 100,000 or more is 15 miles

Section 2695.8(e)(4) bars requiring a claimant to travel an unreasonable distance to have a vehicle inspected or repaired or to get an estimate. For both first and third party claims, more than 15 miles is unreasonable in cities or urban areas of 100,000 or more, and more than 25 miles elsewhere, measured from where the vehicle is made available. Some travel is allowed, so a total ban is wrong.

Reference: 10 CCR 2695.8(e)(4)(A)

Correct answer: D. Replace all items in the damaged area so the roof has a reasonably uniform appearance

Under a replacement cost policy, Section 2695.9(a)(2) requires that when replaced items do not match in quality, color or size, the insurer replace all items in the damaged area so they conform to a reasonably uniform appearance. Section 2695.9(a)(1) adds that the insured pays nothing but the deductible, with no depreciation, and that consequential damage caused by making the repair is included in the loss.

Reference: 10 CCR 2695.9(a)

Correct answer: A. The labor needed to repair, rebuild or replace the damaged property

Section 2695.9(f)(1) states that, except for labor already built into the cost of manufactured materials or goods, the labor needed to repair, rebuild or replace covered property is not a component of physical depreciation and may not be depreciated or treated as betterment. Under Insurance Code Section 2051, depreciation applies only to components normally repaired or replaced during the property's useful life, such as roofing, carpet and water heaters.

Reference: 10 CCR 2695.9(f)(1); Cal. Ins. Code Section 2051