CA Insurance Policies & Regulations 3

Question 1

Which doctrine applies in California when a covered peril and an excluded peril both contribute to a single loss?

Accepted Answer

Efficient proximate cause doctrine

Answer

California courts apply the efficient proximate cause doctrine: if the predominant cause is covered, the loss is covered even if an excluded peril contributed.

Question 2

Under the California Standard Form Fire Policy, which of the following is NOT a standard covered peril?

Accepted Answer

Earthquake

Answer

The California Standard Form Fire Policy covers fire, lightning, and explosion, but earthquake is excluded and requires a separate policy or endorsement.

Question 3

An insured under a commercial general liability (CGL) policy is sued for copyright infringement in advertising. Under which coverage part would this typically be addressed?

Accepted Answer

Coverage B – Personal and Advertising Injury Liability

Answer

Coverage B of a CGL policy addresses personal and advertising injury, which includes copyright infringement in the insured's advertisement.

Question 4

What is the purpose of a 'Mortgagee Clause' (also called a 'standard mortgage clause') in a California homeowner's policy?

Accepted Answer

It protects the lender's interest independently, even if the insured's coverage is voided by misrepresentation

Answer

The standard mortgage clause gives the lender an independent right to recover, meaning the insurer cannot use the insured's acts or omissions to defeat the lender's claim.

Question 5

In California, what is the minimum notice period an insurer must give before canceling a personal lines policy that has been in force for more than 60 days (for reasons other than non-payment)?

Accepted Answer

30 days

Answer

California Insurance Code Section 677 requires at least 30 days' notice for mid-term cancellation of personal lines policies in force over 60 days for reasons other than non-payment.

(CA) Certified Adjuster Designation Practice Test

(CA) Certified Adjuster Designation Practice Test

CA Insurance Policies & Regulations 3