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California Adjusters License PSI Latest Update Actual Exam 120 Questions and 100% Verified Correct Answers Guaranteed A+ Verified by Professor$20.49
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California Adjusters License PSI Latest Update
2024-2025 Actual Exam 120 Questions and 100%
Verified Correct Answers Guaranteed A+ Verified
by Professor
A business owner who is careless about property left in his care may be guilty of which
of the following hazards:
Answer Choices: Select the Correct Answer
Morale.
Moral.
Catastrophic.
Occupational. - CORRECT ANSWER: Morale. is correct.
EXPLANATION:
A morale hazard is one created by carelessness or indifference, the failure to exercise
due care. A moral hazard is one deliberately created by an insured party willing to trade
a loss for a claim payment.
A company or staff adjuster represents the interests of:
The insurer.
The insured.
The claimant.
The public. - CORRECT ANSWER: The insurer. is correct.
EXPLANATION:
Company or staff adjusters are individuals employed by a property and casualty
insurance company to settle on its behalf claims brought by insureds. They work directly
for the insurance company as year-round salaried employees. Staff adjusters evaluate
the merits of each claim and make recommendations to the insurance company.
,A dwelling insured under an HO-3 form has been vacant for 61 consecutive days. The
dwelling has been vandalized. The vandals decide to set fire to the dwelling to conceal
any evidence of their presence. The insurer will:
Answer Choices: Select the Correct Answer
Deny the loss.
Pay the fire loss and not the vandalism damage.
Apply the deductible to the vandalism damage.
Pay only the actual cash value less the deductible. - CORRECT ANSWER: Deny the
loss. is correct.
EXPLANATION:
The insurer will deny the loss because the fire is a result of vandalism. Since the
dwelling has been vacant for longer than the 60-day limit, coverage will not apply. (Note:
In New York the provisions that restrict coverage for vacant dwellings is 30 days.)
A guest on vacation deposits cash and traveler's checks in the hotel safe deposit box
located behind the front desk. When the guest attempts to retrieve them, the box is
empty. What coverage is required to cover this loss for the hotel?
Answer Choices: Select the Correct Answer
Funds Transfer Fraud
Safe Depository
Guests property
Kidnap/ransom Extortion - CORRECT ANSWER: Guests property is correct.
EXPLANATION:
Guests' property in Safe deposit boxes are covered by the crime form called Guests
Property.
A large tree has fallen into Paul's yard caused by wind. The claims service
representative advises Paul to call a contractor to remove the tree and send the
insurance company the bill. The bill is $1,200. However, the policy coverage for the
debris removal of a tree that has fallen by wind is only $500 unless the tree hits the
house, which was not the case. What should the adjuster do?
Answer Choices: Select the Correct Answer
,Pay only $500
Pay the $1,200
Explain the policy provisions and ask to insured to reimburse the insurer for the
difference
Negotiate - CORRECT ANSWER: Pay the $1,200 is correct.
EXPLANATION:
The consumer relied on the statements of the claims representative so the insurance
company would be estopped from denying the claim. The insurer had already waived its
right to deny full payment of the claim because of the statements of the claims
representative. Therefore, the $1,200 should be paid.
A license issued by the Commissioner that contains certain conditions is called:
Answer Choices: Select the Correct Answer
A restricted license.
A temporary license.
A surplus lines license.
A non-restricted license. - CORRECT ANSWER: A restricted license. is correct.
EXPLANATION:
A restricted license is a license that is issued by the Commissioner with reasonable
restrictions on the license and license holder.
A main street business has suffered an explosion loss from a hot water heating boiler.
The civil authorities have blocked off the street and the insured's customers cannot get
to his store. The insured carries a Businessowners Policy. He sustains a loss of income.
Before his policy will pay any loss of income there is a ______hour waiting period and
the policy will then pay for loss of income up to _____weeks.
Answer Choices: Select the Correct Answer
72/four
24/two
12/four
48/three - CORRECT ANSWER: 72/four is correct.
, EXPLANATION:
The policy has a 72 hour waiting period before coverage will pay. It will pay for loss of
income for up to four weeks or until the expiration date of the policy. The previous form
provided for three weeks of coverage. The newer forms also require that the business
suffering the damage must be located one mile or less from the insured's location.
A method of replacing damaged property with something not exactly like the damaged
item, but will perform the same is known as:
Answer Choices: Select the Correct Answer
Agreed Replacement Value.
Stated Amount Value.
Functional Replacement Cost.
Replacement Cost. - CORRECT ANSWER: The correct answer is: Functional
Replacement Cost..
EXPLANATION:
Functional replacement cost will replace the damaged item, but with something that
might not be exactly the same.
A person acting in a catastrophe or emergency situation and registered with the
insurance commissioner for that purpose:
Answer Choices: Select the Correct Answer
Does not have to obtain an adjuster's license.
Must obtain an independent adjuster's license.
May only adjust property losses.
May only adjust casualty losses. - CORRECT ANSWER: The correct answer is: Does
not have to obtain an adjuster's license. .
EXPLANATION:
A person acting in a catastrophe or emergency situation does not have to obtain an
adjuster's license. Such a person is usually authorized to act in these situations for a
specified number of days depending on the state where catastrophe or emergency has
been declared.
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