CALA Property Damage Assessment 5

Question 1

A landlord's policy covers a rental dwelling damaged by a tenant's cooking fire. The tenant is found negligent. Can the insurer subrogate against the tenant?

Accepted Answer

It depends on the policy — some landlord policies waive subrogation rights against tenants

Answer

Some landlord policies include a waiver of subrogation against tenants, treating them as implied insureds; others preserve the insurer's right to pursue the negligent tenant — the policy language controls.

Question 2

When does a 'concurrent causation' issue arise in a property damage claim?

Accepted Answer

When both a covered peril and an excluded peril contribute to the same loss

Answer

Concurrent causation occurs when a covered peril and an excluded peril combine to produce a single loss, creating a coverage dispute that state courts and anti-concurrent causation clauses address differently.

Question 3

An adjuster identifies mold behind damaged drywall during a water loss inspection. What is the most appropriate next step?

Accepted Answer

Document the mold and determine whether the policy includes or excludes mold remediation coverage

Answer

The adjuster must document the mold, verify whether the policy provides mold coverage or has a mold exclusion or sublimit, and then handle remediation costs accordingly.

Question 4

Which of the following describes 'functional obsolescence' when depreciating a structure?

Accepted Answer

A loss in value due to outdated design, layout, or features that reduce utility

Answer

Functional obsolescence reduces a property's value due to outdated features (e.g., low ceilings, poor floor plans) that make it less desirable even if it is physically sound.

Question 5

A fire destroys inventory in a retail store. The business owner has a commercial property policy with a coinsurance clause of 80%. The building was insured for $400,000 but its replacement cost was $600,000. How does the coinsurance clause affect a $100,000 inventory loss?

Accepted Answer

The insured collects only a proportionate share: ($400k / $480k) × $100k

Answer

The coinsurance formula is (Amount Carried ÷ Amount Required) × Loss; required insurance = 80% × $600k = $480k, so the insured recovers ($400k ÷ $480k) × $100k ≈ $83,333.

(CALA) Certified All-Lines Adjuster Practice Test

(CALA) Certified All-Lines Adjuster Practice Test

CALA Property Damage Assessment 5