CA Insurance Policies & Regulations 2

Question 1

Under California Insurance Code, what is the maximum number of days an insurer has to acknowledge receipt of a first-party property damage claim?

Accepted Answer

10 days

Answer

California Insurance Code Section 790.03 requires insurers to acknowledge receipt of a claim within 10 working days.

Question 2

Which California regulation governs unfair claims settlement practices by insurers?

Accepted Answer

California Code of Regulations Title 10, Chapter 5, Subchapter 7.5

Answer

CCR Title 10, Chapter 5, Subchapter 7.5 (Fair Claims Settlement Practices Regulations) sets specific standards for claims handling in California.

Question 3

A homeowner's policy excludes 'earth movement.' A sinkhole causes foundation damage. How should a California adjuster treat this claim?

Accepted Answer

Investigate whether a covered peril triggered the sinkhole before applying the exclusion

Answer

California adjusters must investigate whether a covered peril (e.g., burst pipe) initiated the earth movement before applying the exclusion under concurrent causation rules.

Question 4

What does the California Insurance Code require regarding written acceptance or denial of a claim after proof of loss is submitted?

Accepted Answer

Within 40 calendar days

Answer

California insurers must accept or deny a claim within 40 calendar days after receiving proof of loss under the Fair Claims Settlement Practices Regulations.

Question 5

Which of the following best describes a 'reservation of rights' letter in California claims handling?

Accepted Answer

A notice that the insurer is investigating coverage while continuing to defend or adjust without waiving coverage defenses

Answer

A reservation of rights letter protects the insurer's ability to deny coverage later while it investigates, preventing waiver or estoppel.

(CA) Certified Adjuster Designation Practice Test

(CA) Certified Adjuster Designation Practice Test

CA Insurance Policies & Regulations 2