Idaho Independent Adjuster Practice Test: Idaho law, Part 2

Correct answer: D. Report to the state fire marshal within 7 days

Section 41-258 requires every authorized fire insurance company to report to the state fire marshal, within 7 days after settlement, all fire losses of $1,000 or more on Idaho property and all fire losses involving death or personal injury. The report states the date of the fire, the probable loss, the character of the property and the supposed cause, and it is in addition to any other required reports.

Reference: Idaho Code 41-258

Correct answer: B. No, because he had no insurable interest at the time of loss

Section 41-1806(1) makes a property insurance contract enforceable only for the benefit of persons with an insurable interest in the property at the time of the loss. Omar sold the house before the fire, so he had no actual, lawful and substantial economic interest left to protect. Having an interest when the policy began does not help, and paid premium does not create an interest.

Reference: Idaho Code 41-1806(1) and (2)

Correct answer: C. No, since it was not fraudulent or material to the risk

Section 41-1811 treats application statements as representations, not warranties. A misrepresentation or incorrect statement prevents recovery only if it was fraudulent, was material to the acceptance of the risk or the hazard assumed, or the insurer in good faith would not have issued the policy on the same terms had it known the truth. None of those applies to Beth's innocent error.

Reference: Idaho Code 41-1811

Correct answer: D. $52,000

Idaho Code 49-117(20) sets the financial responsibility limits at $25,000 bodily injury per person, $50,000 per accident and $15,000 property damage (25/50/15). The first injured person is capped at $25,000 and the second receives the full $12,000; that $37,000 is within the $50,000 per-accident limit. Property damage is capped at $15,000. $25,000 + $12,000 + $15,000 = $52,000, and Jordan is personally responsible for the rest.

Reference: Idaho Code 49-117(20); 49-1229(1)

Correct answer: A. The insurer need not add UIM back to the renewal policy

Section 41-2502(1) requires UM and UIM coverage at the 49-117 bodily injury limits, but 41-2502(2) lets the named insured reject either or both in writing or by electronic record. The rejection is effective for all other insureds and named insureds, and the rejected coverage need not be provided in a renewal or replacement policy from the same insurer or an affiliate. Rejecting UIM does not affect UM.

Reference: Idaho Code 41-2502(1) and (2)

Correct answer: C. No, the insolvency must occur within one year after the accident

Section 41-2503(1) treats an insured vehicle as uninsured when its liability insurer cannot pay because of insolvency, but 41-2504 limits this insolvency protection to accidents during the UM policy period where the at-fault driver's insurer becomes insolvent within one year after the accident. Fourteen months is too late unless the insurer voluntarily offers broader terms. The 18-month period is a guaranty association filing deadline.

Reference: Idaho Code 41-2503(1); 41-2504

Correct answer: B. Only when the coverage is provided at no premium

IDAPA 18.02.02.015.03 addresses illusory coverage. Offset UIM limits shrink by whatever the other driver's insurer pays, and Idaho's underinsured definition in 41-2503(2) already assumes the other driver carries at least 49-117 limits, so offset UIM at those same limits would pay nothing. The rule therefore allows it only at a $0.00 premium. Offset declarations must also say the coverage decreases by other payments.

Reference: IDAPA 18.02.02.010.03 and 015.02 to 015.03; Idaho Code 41-2503(2)

Correct answer: D. 20 days

Because the policy has been in effect more than 60 days, sections 41-2506 through 41-2512 apply, and 41-2507(7)(a) allows cancellation when a household driver's license was suspended within the prior 36 months. Section 41-2508(1) then requires at least 20 days' notice before the cancellation date; 10 days applies only to nonpayment of premium. Thirty days is the notice for nonrenewal under 41-2508(2).

Reference: Idaho Code 41-2506(2); 41-2507(7)(a); 41-2508(1) and (2)

Correct answer: A. A $75 fine and proof of financial responsibility for 1 year

Section 49-1229(5) makes a first violation an infraction with a $75 fine; a second or later conviction within five years is a misdemeanor punishable by a fine up to $1,000, up to six months in jail, or both. Section 49-1208(3) also requires a first offender to give and maintain proof of financial responsibility for one year after the conviction, or three years after a repeat conviction within five years.

Reference: Idaho Code 49-1229(5); 49-1208(3)

Correct answer: C. May 6, five days after the postmark

Section 41-1842(3)(b)(i) requires notice of cancellation for nonpayment of premium to be mailed or delivered at least 10 days before the effective date, and when the notice goes by U.S. mail, the 10-day period begins to run five days after the postmark. A May 1 postmark starts the clock on May 6. Idaho's 2026 amendment, effective January 1, 2027, lengthens other commercial notices but keeps this rule.

Reference: Idaho Code 41-1842(3)(b)(i)

Correct answer: B. $300,000

Section 41-3608(1)(a)(iii) caps the association's payment at $300,000 per claim for covered claims other than worker's compensation and unearned premium, and (1)(b) never requires more than the insolvent insurer owed under the policy. Her $420,000 claim is therefore paid only up to $300,000, and the association does not cover the remaining $120,000. Worker's compensation claims, by contrast, are paid in full.

Reference: Idaho Code 41-3608(1)(a)(iii) and (1)(b)

Correct answer: A. A worker's compensation benefits claim

Section 41-3608(1)(a)(i) obligates the association to pay the full amount of a covered claim for worker's compensation benefits. Unearned premium refunds are capped at $10,000 per policy under (1)(a)(ii), and all other covered claims, such as homeowners and auto liability claims, are capped at $300,000 per claim under (1)(a)(iii). Claims generally must be filed within 18 months after the liquidation order.

Reference: Idaho Code 41-3608(1)(a) and (1)(b)

Correct answer: D. A $20,000 bond or irrevocable letter of credit

Section 41-5812 requires a public adjuster to secure, before licensing and for the life of the license, either a surety bond or an irrevocable letter of credit of at least $20,000. Neither may be terminated without at least 30 days' prior written notice to the department and the licensee, and the authority to act as a public adjuster ends automatically if the security terminates or becomes impaired.

Reference: Idaho Code 41-5812

Correct answer: C. Reasonable compensation based on time spent and expenses

Section 41-5815(3) says that if the insurer pays or commits in writing to pay the policy limit within 72 hours after the loss is reported, the public adjuster may not take a percentage commission and must tell the insured the recovery might not be increased. The adjuster is entitled only to reasonable compensation for time spent and expenses incurred. Nothing in the section voids the contract or sets a half-percentage fee.

Reference: Idaho Code 41-5815(3)

Correct answer: B. Notice within 60 days; claim within 1 year

Section 72-701 requires notice of the accident to the employer as soon as practicable but not later than 60 days after it happens, and a claim for compensation within one year after the accident. The claim requirement is excused if compensation was paid voluntarily or a hearing application was filed. The 10-day period is the employer's deadline to report the injury to the Industrial Commission under 72-602.

Reference: Idaho Code 72-701; 72-602(1)