California Insurance Adjuster Practice Test: California law, Part 2

Correct answer: B. $350,000

As amended by SB 495 effective January 1, 2026, Section 10103.7(b)(1) requires an offer of no less than 60% of the personal property limit, up to a maximum of $350,000, without an itemized claim. Sixty percent of $700,000 is $420,000, which exceeds the cap, so the minimum offer is $350,000. The family can still file an itemized claim to recover more, up to the $700,000 limit.

Reference: Cal. Ins. Code Section 10103.7(b); CDI 2026 Annual Notice

Correct answer: D. June 10, 2029

Section 2051.5(b)(1) bars a time limit shorter than 12 months from the first actual cash value payment to collect full replacement cost, and for a loss relating to a state of emergency the minimum is 36 months. June 10, 2026 plus 36 months is June 10, 2029. The insurer must also grant additional six-month extensions for good cause, such as permit delays or a shortage of contractors.

Reference: Cal. Ins. Code Section 2051.5(b)

Correct answer: C. Give her a written status report and set up a primary point of contact

The Section 2071 fire policy requires a written status report, summarizing decisions and disputed items, when a third or later adjuster is assigned within six months. For state of emergency claims, Section 14047 adds a primary point of contact on the insurer's staff, reachable directly, who stays assigned until the claim closes or suit is filed. Neither section restarts claim deadlines or moves the claim elsewhere.

Reference: Cal. Ins. Code Sections 2071 and 14047

Correct answer: A. By midnight of the third business day after signing and receiving the contract

Section 15027(b)(13) and (f)(1) give the insured the right to cancel by midnight of the third business day after signing and being given a copy of the signed contract. The five-calendar-day period in Section 15027(y) applies only when the loss is in an area subject to a declared catastrophic disaster. After cancellation, the public adjuster must return any payments within five business days (Section 15027(m)).

Reference: Cal. Ins. Code Section 15027(b)(13), (f)(1), (m) and (y)

Correct answer: C. After 7 days from the end of the loss-producing occurrence, between 8 a.m. and 6 p.m.

Section 15027(d) bars solicitation during a loss-producing occurrence, which continues while its causes, emergency responders or an evacuation order remain at the property. For residential property in a catastrophic disaster area, Section 15027.1 adds a wait of seven calendar days after the occurrence ends, unless the insured initiates contact. Section 15027(e) also bars contact between 6 p.m. and 8 a.m. unless the policyholder requests it.

Reference: Cal. Ins. Code Sections 15027(d) and (e) and 15027.1

Correct answer: B. $100

Section 15028(d) prohibits a public adjuster from offering more than $100 to a person for referring a loss unless the adjuster employs that person and the person is licensed under the Public Insurance Adjusters Act. The same section bars misrepresentation in soliciting contracts, advancing money to potential clients to get business, and any financial interest in a salvage or repair firm working on the adjuster's claims.

Reference: Cal. Ins. Code Section 15028

Correct answer: C. $30,000/$60,000/$15,000

Section 16056(a)(2) requires at least $30,000 for bodily injury to one person, $60,000 for bodily injury to two or more people and $15,000 for property damage per accident, replacing the old 15/30/5 limits. Insurance Code Section 11580.1(b)(1) ties auto liability policies to these minimums. Under Section 16056(d), the limits rise again to 50/100/25 for policies issued or renewed on or after January 1, 2035.

Reference: Cal. Vehicle Code Section 16056; Cal. Ins. Code Section 11580.1(b)(1)

Correct answer: B. $50,000

A policy renewed after January 1, 2025 must carry at least $30,000 per person and $60,000 per accident for bodily injury (Vehicle Code Section 16056(a)(2)). Sara's recovery is capped at the $30,000 per person limit and Luis's $20,000 is fully covered, for a total of $50,000, which fits within the $60,000 per accident limit. Paying $60,000 would ignore the per person cap.

Reference: Cal. Vehicle Code Section 16056(a)(2)

Correct answer: A. $3,500

When the policy has no collision coverage, Section 11580.26(a)(2) limits uninsured motorist property damage to the vehicle's actual cash value or $3,500, whichever is less, so the most payable is $3,500. Payment requires physical contact with an uninsured vehicle whose owner, operator or license number is identified, and a report to the insurer within 10 business days. With collision coverage, the offered coverage instead pays the collision deductible.

Reference: Cal. Ins. Code Section 11580.26

Correct answer: B. It is an association of admitted insurers that provides basic property insurance to owners unable to obtain it through normal channels

Sections 10091, 10094 and 10095 make every insurer writing basic property insurance in California a member of the FAIR Plan Association, which offers basic property insurance (standard fire policy and extended coverage perils plus vandalism and malicious mischief) to owners who cannot obtain it through normal channels after diligent effort. Regulation 2695.2(i) includes the FAIR Plan in its definition of insurer, so the fair claims regulations apply.

Reference: Cal. Ins. Code Sections 10091, 10094 and 10095; 10 CCR 2695.2(i)

Correct answer: C. $1,500,000

CIGA covered claims exclude any portion over $500,000, except workers compensation claims. For residential property, each coverage category is a separate covered claim, and a dwelling structure claim may reach $1,000,000 or the amount recoverable under the policy, whichever is less. Daniel receives $1,000,000 for the dwelling plus $500,000 for contents, or $1,500,000. Claims of $100 or less are not covered at all.

Reference: Cal. Ins. Code Section 1063.1(c)(6) and (c)(7)

Correct answer: D. 60 days

Section 1872.4(a) requires the report, on CDI's form, within 60 days after the insurer's determination. No report is needed if further investigation shows the claim was not fraudulent, or if the parties agree on the amount and the insurer has no reasonable grounds to suspect fraud. Separately, 10 CCR 2695.7(k) extends the 40-day claim decision period to 80 days when the insurer has a documented reasonable basis to suspect fraud.

Reference: Cal. Ins. Code Section 1872.4; 10 CCR 2695.7(k)

Correct answer: B. 90 days

Section 2698.39(c) sets three levels of anti-fraud training: an orientation for all newly hired employees within 90 days of starting their duties, annual in-service training for integral anti-fraud personnel such as claims staff, and at least five hours of continuing anti-fraud training each calendar year for SIU personnel. Training records must be kept and made available to the Department on request.

Reference: 10 CCR 2698.39

Correct answer: A. A 14-day waiting period for illnesses, with no waiting period for accidents

Section 12880.7(b) allows waiting periods of no more than 30 days for illnesses or orthopedic conditions not caused by an accident, and forbids any waiting period for accidents. Section 12880.7(c) bars waiting periods on renewals. A policy with a waiting period must let the insured waive it by completing a medical examination, and the insurer bears the burden of proving that a preexisting condition exclusion applies.

Reference: Cal. Ins. Code Section 12880.7

Correct answer: B. 30 days

Section 12880.2(j)(2) requires a notice on the policy allowing the insured to return it during a free look period of not less than 30 days. Returning it voids the policy from the beginning, and premiums and fees must be refunded within 30 days of notice, unless the insurer has paid a claim or promised one in writing. The insurer must also deliver its Insurer Disclosure of Important Policy Provisions in at least 12-point type.

Reference: Cal. Ins. Code Section 12880.2(j)