Insurance Policies & Regulations Flashcards
7 cards from real CA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Insurance Policies & Regulations flashcards as text
Under California Insurance Code, what is the maximum number of days an insurer has to acknowledge receipt of a first-party property damage claim?
Answer: 10 days
California Insurance Code Section 790.03 requires insurers to acknowledge receipt of a claim within 10 working days.
Which California regulation governs unfair claims settlement practices by insurers?
Answer: California Code of Regulations Title 10, Chapter 5, Subchapter 7.5
CCR Title 10, Chapter 5, Subchapter 7.5 (Fair Claims Settlement Practices Regulations) sets specific standards for claims handling in California.
A homeowner's policy excludes 'earth movement.' A sinkhole causes foundation damage. How should a California adjuster treat this claim?
Answer: Investigate whether a covered peril triggered the sinkhole before applying the exclusion
California adjusters must investigate whether a covered peril (e.g., burst pipe) initiated the earth movement before applying the exclusion under concurrent causation rules.
What does the California Insurance Code require regarding written acceptance or denial of a claim after proof of loss is submitted?
Answer: Within 40 calendar days
California insurers must accept or deny a claim within 40 calendar days after receiving proof of loss under the Fair Claims Settlement Practices Regulations.
Which of the following best describes a 'reservation of rights' letter in California claims handling?
Answer: A notice that the insurer is investigating coverage while continuing to defend or adjust without waiving coverage defenses
A reservation of rights letter protects the insurer's ability to deny coverage later while it investigates, preventing waiver or estoppel.
Under California law, when must an insurer provide a written settlement offer for a first-party claim?
Answer: Within 15 working days of accepting liability
California regulations require a written settlement offer within 15 working days after liability has been accepted by the insurer.
A California auto policy has a $500 deductible for collision. The insured's vehicle sustains $450 in damage. What is the proper claims handling outcome?
Answer: Pay $0 since damage does not exceed the deductible
When damages do not exceed the applicable deductible, the insurer owes nothing — the insured bears the full loss up to the deductible amount.