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California P&C Insurance Cheat Sheet

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CDI + Licensing

  • Not published of exam
  • CDI PSI AB 943 Ethics Course Fingerprints CE

California Property

  • Not published of exam
  • FAIR Plan CEA Homeowners Earthquake Wildfire Flood

California Casualty

  • Not published of exam
  • Auto Minimums Prop 103 Workers Comp UM/UIM CGL Bonds

Ethics + Practices

  • Not published of exam
  • Claims Timelines CIGA Unfair Practices Producer Duties Trust Funds Surplus Lines

Quick Facts

  • Exam Property and Casualty
  • License Property/Casualty Broker-Agent
  • Regulator CDI
  • Provider PSI
  • Questions 150
  • Time 3 hours
  • Pass 60%
  • Prelicense 12-hour ethics/code
  • Fingerprint Capital Live Scan
  • Auto minimum 30/60/15

License Sequence LI

  • Exam, ethics, application, fingerprints, issuance.
  • Pass exam 12-hour course CDI application Live Scan

License Picker LI

  • Need both lines → P&C combined ( One exam )
  • Only property → Property broker-agent
  • Only liability → Casualty broker-agent
  • Personal auto only → Limited lines auto
  • Business package focus → Commercial lines
  • Client shopping → Broker authority
  • Carrier appointment → Agent authority
  • Adjust claims → Adjuster license

Exam Map LI

  • P&C combined 150 questions
  • Property only 75 questions
  • Casualty only 75 questions
  • Time 3 hours
  • Passing 60 percent
  • Delivery PSI computer exam
  • Remote PSI proctored option
  • Result Immediate screen report

License Path LI

  • Age 18 or older
  • Exam Pass within year
  • Ethics/code 12 hours required
  • Fraud study Included hour
  • Certificate Three-year validity
  • Application Submit to CDI
  • Fingerprints After application
  • Background DOJ/FBI review

CDI Rules LI

  • Commissioner Elected official
  • Term Four years
  • CDI Insurance regulator
  • Rate review Prior approval
  • Market conduct Insurer practices
  • Licensing Producer authority
  • Complaints Consumer protection
  • Fraud Investigate/prosecute

CE + Renewal LI

  • License term Two years
  • CE total 24 hours
  • Ethics CE 3 hours
  • Home valuation One-time training
  • Address change Report promptly
  • Background change 30 days
  • Nonresident CE Home-state compliance
  • Late renewal Penalty risk

Property Gaps PR

  • Fire standard; quake and flood separate.
  • Homeowners fire CEA quake NFIP flood

FAIR vs Standard PR

FAIR Plan

  • Last resort
  • Basic property
  • Coverage gaps

Standard policy

  • Voluntary market
  • Broader package
  • Normal underwriting
  • FAIR after diligent shopping

Property Market Picker PR

  • Standard home available → Voluntary insurer
  • Declined for wildfire → FAIR Plan
  • Need broader package → Wraparound policy
  • Need earthquake → CEA partner
  • Need flood → NFIP/private flood
  • Commercial high risk → FAIR commercial
  • Moveable business property → Inland marine
  • Under construction → Builders risk

Property Forms PR

  • HO-3 Open dwelling
  • HO-4 Renters contents
  • HO-5 Open property
  • HO-6 Condo unit
  • DP-1 Basic named perils
  • DP-3 Open dwelling
  • CPP Commercial package
  • BOP Small business package

CEA vs Homeowners PR

CEA

  • Earthquake shaking
  • Separate policy
  • Partner sold

Homeowners

  • Fire/wind/theft
  • Earth movement excluded
  • Companion policy
  • Earthquake needs separate coverage

FAIR Plan PR

  • Purpose Basic property access
  • Role Insurer of last resort
  • Eligible Cannot obtain coverage
  • Association Insurer-run plan
  • Residential limit $3 million
  • Commercial limit $20 million
  • Wildfire discount Mitigation credit
  • Companion policy Wraparound coverage

RC vs ACV PR

Replacement cost

  • New-for-old
  • No depreciation
  • Higher premium

ACV

  • RC minus depreciation
  • Lower settlement
  • Older property issue
  • Depreciation is the divider

CEA Earthquake PR

  • CEA Residential earthquake insurer
  • Partner insurers Sell/service policies
  • Standalone Not available
  • Dwelling Home structure
  • Personal property Contents coverage
  • Loss of use No deductible
  • Deductible Percentage based
  • Purchase timing Before earthquake

Disaster Property PR

  • Earth movement Usually excluded
  • Flood Separate policy
  • Smoke damage Covered fire loss
  • Wildfire Fire peril issue
  • Moratorium Cancel/nonrenew pause
  • ALE Extra living expense
  • Debris removal Policy limit issue
  • Replacement cost No depreciation

Auto Rating Order CA

  • Safe miles experience drive California auto rates.
  • Safety record Annual miles Driving experience

UM vs UIM CA

UM

  • No insurance
  • Hit-and-run
  • Your policy responds

UIM

  • Too little insurance
  • Damages exceed limits
  • Gap coverage
  • None versus not enough

Auto Picker CA

  • Legal minimum → 30/60/15
  • Low-income driver → CLCA ( 10/20/3 )
  • Other driver uninsured → UM
  • Other limits too low → UIM
  • Hit vehicle/object → Collision
  • Theft/fire/glass → Comprehensive
  • Business vehicle → Commercial auto
  • Rideshare period → TNC coverage

Prop 103 CA

  • Prior approval Rates approved first
  • Rate standard Not excessive
  • Commissioner Elected by voters
  • Intervention Consumer participation
  • Good driver Mandatory discount
  • Discount At least 20%
  • Take-all-comers Qualified good drivers
  • Primary use Auto rating rules

Prior Approval vs File-Use CA

Prior approval

  • CDI approves first
  • Prop 103 system
  • Consumer intervention

File-use

  • File then use
  • Not California default
  • Less restrictive
  • California tests prior approval

Auto Rating CA

  • First factor Driving safety record
  • Second factor Annual miles
  • Third factor Driving experience
  • Optional factors Commissioner approved
  • Credit score Not primary factor
  • Occupation Restricted rating use
  • Education Restricted rating use
  • ZIP code Limited territory role

Auto Coverage CA

  • BI person $30,000 minimum
  • BI accident $60,000 minimum
  • PD $15,000 minimum
  • 30/60/15 Standard 2025 limits
  • CLCA Low-cost program
  • CLCA limits 10/20/3
  • UM Uninsured driver
  • UIM Underinsured driver

Workers Comp CA

  • One employee Coverage required
  • Family labor Still employee
  • Medical Work injury care
  • Temporary disability Wage replacement
  • Permanent disability Impairment benefit
  • Death benefits Dependents paid
  • State Fund Public insurer
  • Uninsured employer Criminal offense

Claims Clock ET

  • Fifteen starts, forty decides, thirty pays.
  • 15 acknowledge 40 accept/deny 30 pay

Agent vs Broker ET

Agent

  • Represents insurer
  • Appointment authority
  • May bind coverage

Broker

  • Represents insured
  • Client fiduciary
  • Shops markets
  • Authority follows representation

Claims Picker ET

  • Claim received → Acknowledge ( 15 days )
  • Need documents → Forms/help ( 15 days )
  • Proof received → Accept/deny ( 40 days )
  • More time needed → Status notice ( 30 days )
  • Settlement reached → Pay claim ( 30 days )
  • Denial issued → Written basis
  • Insurer insolvent → CIGA
  • Surplus policy → No CIGA

Claims Timelines ET

  • Acknowledge claim 15 days
  • Send forms 15 days
  • Accept/deny 40 days
  • Status notice Every 30 days
  • Pay settlement 30 days
  • Auto repairs 10 days
  • Denial Written reason
  • CDI response 21 days

CIGA Memory ET

  • Admitted insolvent insurer, not sales pitch.
  • Admitted only Insolvency $500,000 No advertising

Admitted vs Surplus ET

Admitted

  • CDI authorized
  • CIGA applies
  • Filed rates

Surplus

  • Nonadmitted carrier
  • No CIGA
  • Disclosure required
  • Protection differs sharply

CIGA ET

  • Purpose Insolvent insurer claims
  • Trigger Court liquidation
  • Member Admitted P&C insurer
  • Most claims $500,000 cap
  • Policy limit Also caps claim
  • Workers comp No statutory cap
  • Surplus lines Not covered
  • Sales use Do not advertise

CIGA vs CEA ET

CIGA

  • Insolvency backstop
  • Admitted insurers
  • Claim caps

CEA

  • Earthquake insurer
  • Residential risks
  • Partner serviced
  • Backstop versus insurer

Producer Conduct ET

  • Agent Represents insurer
  • Broker Represents insured
  • Fiduciary Broker duty
  • Misrepresentation False policy statement
  • Rebating Illegal inducement
  • Twisting Misleading replacement
  • Commingling Mixing premium funds
  • Records Keep five years

Surplus Lines ET

  • Admitted CDI authorized
  • Nonadmitted Surplus market
  • Diligent search Admitted declinations
  • Broker Special license
  • Disclosure Nonadmitted notice
  • CIGA No protection
  • Taxes Broker remits
  • Use case Hard-to-place risk

Common Traps

Old Auto Limits

  • 15/30/5 obsolete ≠ 30/60/15 current

Prelicensing Timing

  • Exam allowed first ≠ License needs 12 hours

FAIR Plan Scope

  • Basic property only ≠ Not full homeowners

Earthquake Coverage

  • Homeowners excludes earth movement ≠ CEA policy separate

CIGA Sales

  • Protection exists ≠ Advertising prohibited

Claim Denial

  • Oral denial insufficient ≠ Written basis required

Worker Classification

  • Family can be employee ≠ Contractor label insufficient

Broker Duty

  • Agent serves insurer ≠ Broker serves insured

Last Minute

  • 1. P&C: 150 questions, 3 hours
  • 2. Producer pass score is 60%
  • 3. AB 943 keeps 12 hours
  • 4. Ethics/code before license issuance
  • 5. Auto minimum is 30/60/15
  • 6. Prop 103 = prior approval
  • 7. Rating order: safety, miles, experience
  • 8. Good driver discount: 20%
  • 9. FAIR Plan is last resort
  • 10. CEA sells through partners
  • 11. Claims: 15, 40, 30
  • 12. CIGA: admitted insolvency backstop