California Adjuster Insurance Exam Guide 2026

The Insurance Adjuster (Independent) License

California's adjuster regime is Insurance Code Division 5, added in 1980, and it has three chapters: chapter 1, the Insurance Adjuster Act, sections 14000 to 14099; chapter 2, the Public Insurance Adjusters Act, sections 15000 to 15062; and chapter 3, Emergency Disaster Assessment, sections 16000 to 16032.

Section 14020 states the requirement: 'A person shall not engage in a business regulated by this chapter, or act or assume to act as, or represent themselves to be, a licensee unless the person is licensed under this chapter.' Subdivision (b) adds that a person 'shall not falsely represent that the person is employed by a licensee.'

Section 14021 supplies the definition, and it is built by exclusion. An insurance adjuster is 'a person other than a private investigator as defined in Section 7521 of the Business and Professions Code who, for any consideration whatsoever, engages in business or accepts employment to furnish, or agrees to make, or makes, any investigation for the purpose of obtaining information in the course of adjusting or otherwise participating in the disposal of any claim under or in connection with a policy of insurance on behalf of an insurer.'

The same section closes by confirming what the license is: it 'is in no way intended to limit the ability of a duly licensed independent insurance adjuster to perform the duties of an independent insurance adjuster for any other entity.'

The Department issues four adjuster-family classes on one application form: AJ Insurance Adjuster (Independent), PJ Public Insurance Adjuster, CR Crop Insurance Adjuster, and PI Interim Public Insurance Adjuster.

The most common error about this state

You will read, in many places, that California does not license independent adjusters. It is false. Section 14001 defines 'Commissioner' as the Insurance Commissioner and 'Department' as the Department of Insurance, so the Insurance Adjuster Act is administered by the insurance regulator. The Department publishes examination objectives for the Insurance Adjuster license, and its application form LIC 041-A offers the AJ class by name. What is true is that most COMPANY adjusters are exempt — and that is a different statement entirely.

The Exemptions in Section 14022

Section 14022 lists the exemptions, and the first one does most of the work. Subdivision (a)(1) exempts 'A person employed exclusively and regularly by one employer in connection with the affairs of the employer only and if there exists an employer-employee relationship, except as provided in paragraph (2).'

That is the staff adjuster exemption. A carrier's own salaried claim staff, working only that carrier's claims, fall outside the Act.

Subdivision (a)(3) then adds a clause that fuels the confusion described above: 'In enforcing this chapter, the department shall not be required to investigate whether a person is employed exclusively and regularly by one employer pursuant to paragraph (1).' That is a rule about enforcement effort, not about whether the requirement exists.

The remaining exemptions are worth reading once. Government officers and employees performing official duties. A person engaged exclusively in furnishing information as to the financial rating of persons. An incorporated charitable society organized for the public good and not for private profit. An attorney performing the duties of an attorney. A licensed collection agency making an investigation incidental to the business of the agency. Admitted insurers and licensed agents and brokers 'performing duties in connection with insurance transacted by them'. The legal owner of personal property sold under a conditional sales agreement. Banks and the Comptroller of the Currency. And a person 'engaged solely in the business of securing information about persons or property from public records'.

The last one is the one adjusters most often need to point to. Subdivision (k) exempts 'A building contractor, engineer, technical expert, or other person who is engaged by an insurer or licensed adjuster to provide an expert or professional evaluation of the extent, cause, or origin of damage to the insured property, but who does not otherwise participate in the process of adjusting claims.'

The exemption has a limit built into it

Subdivision (k) ends with a condition: the expert must not 'otherwise participate in the process of adjusting claims.' An engineer who writes a causation report is exempt. The same engineer who starts negotiating the settlement is not. The exemption is about the role performed, not the credential held.

When the Staff Exemption Is Partly Switched Off

Section 14022(a)(1) exempts the staff adjuster 'except as provided in paragraph (2)' — and paragraph (2) is a genuine carve-back that operates only after a disaster.

It provides that after a declared state of emergency, as defined in Government Code section 8558, 'or other emergency declared by a public official, a person licensed under this chapter or a qualified manager shall require that all nonlicensed adjusters under the supervision of that person or manager read and understand the most recent notice and adjuster handbook prepared by the department pursuant to subdivision (a) of Section 14046 no later than 15 calendar days from the date on which the nonlicensed adjuster began claims adjusting activity in California.'

Note what the obligation is and who carries it. It is a read-and-understand duty, and it is imposed on the LICENSEE or QUALIFIED MANAGER, who must require it of the people they supervise.

Section 14046(c) says the same thing from the other direction and makes the reach explicit: the supervising licensed adjuster must impose the duty both on nonlicensed adjusters registered under section 14022.5 and on nonlicensed adjusters 'exempted from this chapter pursuant to subdivision (a) of Section 14022'.

So the exempt staff adjuster is still exempt from licensure after a disaster — but is not exempt from reading the Department's Notice and Handbook.

The Separate Public Adjuster Regime

Chapter 2 is a free-standing licensing act for the adjuster who works for the INSURED rather than the insurer, and its requirements diverge sharply from chapter 1.

Section 15006 gives it teeth. Unlicensed practice carries a civil penalty 'not exceeding ten thousand dollars ($10,000), or if that violation is willful, in an amount not exceeding twenty-five thousand dollars ($25,000)'. Any contract entered with a violator 'may be voided at the option of the insured, and the insured shall not be liable for the payment of any past services rendered or future services to be rendered'. The commissioner may issue a cease and desist order 'without any requirement of notice or hearing', and non-compliance costs 'one hundred dollars ($100) per day' to a maximum of $5,000.

Section 15011 sets the qualifications: 18 years of age; no acts or crimes constituting grounds for denial under section 1668 or 1669; at least two years' experience handling loss claims; an office in California 'with public access during regular business hours'; passing an examination 'in regard to property loss adjusting'; and a $20,000 surety bond under section 15033.

Unlike the adjuster license, the public adjuster license requires prelicensing education: section 15009.1(a) mandates 'a 20-hour prelicensing course of study for the lines of authority for a public insurance adjuster license', and section 15016(b)(12) applies the same course to the apprentice.

Continuing education is the same shape as the adjuster's — 24 hours biennially, three in ethics, under section 15059.1.

The interim or apprentice license under section 15016 runs a maximum of twelve months and is not renewable. Note the arbitrage in section 15011(c): a person licensed as an apprentice 'for 12 full months, shall be considered to have met the two-year experience requirement.'

Two chapters, opposite answers on prelicensing

If a question asks whether California requires prelicensing education for adjusters, the honest answer names the chapter. Chapter 1 adjuster: none. Chapter 2 public adjuster: twenty hours. A single unqualified answer is wrong half the time.

No Prelicensing for This License

There is no prelicensing education requirement for the Insurance Adjuster (Independent) license, and the proof is structural rather than the result of a search that came up empty.

Section 14025 tells the commissioner what to find before granting a license, and the list is closed: 'Before an application for a license is granted, the applicant, or his or her manager, shall meet all of the following: (a) Be at least 18 years of age. (b) Not have committed acts or crimes constituting grounds for denial of licensure under Section 480 of the Business and Professions Code. (c) Shall have had at least two years of experience in adjusting insurance claims or the equivalent thereof as determined by the commissioner. (d) Comply with such other qualifications as the commissioner may fix by rule.'

Four findings. None of them is education.

The corroboration is equally structural: the Department's own prelicensing requirements page lists Life, Accident and Health, Property and Casualty, and Personal Lines, and contains no adjuster entry at all. Producers must complete prelicensing hours in California; adjusters are simply not in that scheme.

What section 14025 does require instead is experience — two years of it. That is the substitute for classroom hours, and it is the requirement most candidates underestimate.

The Department quantifies experience on form LIC 041-A: 'Public Insurance Adjuster and Insurance Adjuster applicants must have two years certified experience in the adjusting field,' and '2,000 hours of compensated time in the adjusting field is equal to one year of experience.' That 2,000-hour conversion appears in no statute — treat it as agency practice and expect the Department to apply it.

The Examination

The examination requirement is permissive on its face. Section 14026: 'The commissioner may require an applicant, or his or her manager, to demonstrate his or her qualifications by a written or oral examination, or a combination of both.' The Commissioner has exercised that power, so in practice the exam is mandatory.

The exam is the Department's, not a vendor's. The Department publishes the content objectives and sets the passing standard. PSI Services, LLC is the delivery vendor, and examinations are given both at Department examination sites and at PSI test centers.

Specifications: 100 multiple-choice questions, 70 percent to pass.

The time limit is published two different ways and the difference has never been reconciled in any instrument. The Department's own examination objectives document states two hours and thirty minutes — 150 minutes. The PSI candidate information bulletin states 158 minutes. The eight-minute gap is consistent with a tutorial or agreement allowance, but nothing says so. Plan on 150 minutes of testing time and be unsurprised if the vendor's screen says 158.

The examination fee is not published in any Department or vendor document located. The re-examination fee is capped at $29 by section 14097(g), and the Department's published schedule shows $26 — but that schedule is stamped March 2014.

Two waivers worth knowing. Crop adjusters are licensed under section 14085(a)(1) 'with the exception of the examination requirement of Section 14026'. And apprentice public adjusters 'shall not be required to take and successfully complete the prescribed public insurance adjuster examination' under section 15016(b)(6) — though a full public adjuster must pass one under section 15011(e).

Two published time limits, and no instrument reconciles them

150 minutes from the Department's examination objectives; 158 minutes from the PSI bulletin. Both are current publications of the two organizations that run the exam between them. Neither figure is wrong on its own terms, and no statute, regulation or bulletin explains the difference. If a question asks for the time limit, the safest answer names the source.

Fingerprints and Background

Section 14024(a)(7) requires the application to include 'Two recent photographs of the applicant, of a type prescribed by the commissioner, and two classifiable sets of his or her fingerprints.'

The statute dates from 1981 and predates Live Scan, so the electronic capture process and the vendors are agency practice rather than statute.

The Department currently names Capital Live Scan for residents, effective 14 February 2025, at a total of $74 — $17 to the FBI, $32 to the Department of Justice and $25 rolling. Non-residents use Accurate Biometrics at $75. Neither figure traces to any section of Division 5.

The substantive standard is imported rather than written in the Insurance Code. Section 14025(b) requires that the applicant 'Not have committed acts or crimes constituting grounds for denial of licensure under Section 480 of the Business and Professions Code' — the general professional licensing denial standard.

What It Costs

State Exam Not published. Neither the Department's examination objectives nor the PSI candidate information bulletin states a per-exam price, and no current fee schedule was located. What IS statutory is the re-examination cap: § 14097(g) sets it at $29, and the Department's published schedule shows $26 — but that schedule is stamped 17 March 2014. The examination itself is the Department's; PSI Services, LLC is the delivery vendor and exams are given at both Department sites and PSI centers.

Fingerprinting Required by § 14024(a)(7), which calls for 'Two recent photographs of the applicant ... and two classifiable sets of his or her fingerprints' with the application. The statute dates from 1981 and predates electronic capture, so the vendors and the amounts are agency practice rather than law: the Department names Capital Live Scan for residents, effective 14 February 2025, at $74 total ($17 FBI, $32 Department of Justice, $25 rolling), and Accurate Biometrics for non-residents at $75. Neither figure traces to any section of Division 5. The substantive background standard is imported from outside the Insurance Code — § 14025(b) applies the denial grounds in Business and Professions Code § 480.

Application § 14097 sets CAPS, not amounts, and expresses the renewal figures as maximums: original license application $72; original branch office certificate $47; renewal 'not more than $283'; branch office renewal 'not more than $56'; delinquency fee 50 percent of the renewal fee capped at $72; re-examination $29. The Department's published schedule shows lower figures — $65, $43, $257, $51, $26 — but is stamped March 2014 and no current schedule was located, so treat any specific figure as provisional. Separately, a $2,000 surety bond is a condition of issue under § 14050, with an exemption cascade for adjusters working under a qualified manager or entity that has filed; public adjusters post $20,000 under § 15033. ⚠️ One live conflict: § 15016(b)(4) sets the apprentice public adjuster license fee at $100 while the Department's own page states $264.

Prelicensing No cost for the Insurance Adjuster (Independent) license, because there is no requirement. § 14025 is a closed list of four findings — age 18, no Business and Professions Code § 480 grounds, two years of claims adjusting experience, and such other qualifications as the commissioner may fix by rule — and education is not among them. The Department's own prelicensing requirements page lists Life, Accident and Health, Property and Casualty and Personal Lines, and contains no adjuster entry at all. ⚠️ PUBLIC ADJUSTERS ARE THE OPPOSITE: § 15009.1(a) requires 'a 20-hour prelicensing course of study for the lines of authority for a public insurance adjuster license', applied to apprentices by § 15016(b)(12). Note that the Department's apprentice page states no prelicensing is required, which contradicts the statute.

Total: About $110 to $170 in Department and vendor charges to get licensed, plus the bond premium — but California publishes fee CAPS rather than fee amounts, so no total can be stated with confidence. § 14097 caps the original application at $72 and the biennial renewal at $283; the Department's published schedule shows $65 and $257, and that schedule is stamped 17 March 2014. Add fingerprinting at roughly $74 for residents and $75 for non-residents, both agency practice with no statutory anchor. Add the examination fee, which is published nowhere. And budget for the $2,000 surety bond under § 14050 — a premium, not a deposit, and waived entirely for an adjuster working under a qualified manager or an entity that has already filed. There is no prelicensing cost for this license, but two years of documented claims adjusting experience is a hard prerequisite under § 14025(c), and the Department counts 2,000 compensated hours as one year. Public adjusters are a different economic proposition: a 20-hour prelicensing course, a $20,000 bond, and a California office with public access during regular business hours.

Section 14097 sets fee CAPS rather than fee amounts, and the renewal figures are expressed as maximums.

Original license application: $72. Original branch office certificate application: $47. Renewal for an insurance adjuster: 'not more than $283'. Branch office renewal: 'not more than $56'. Delinquency fee: 50 percent of the renewal fee, capped at $72. Re-examination: $29.

The Department's published fee schedule shows lower figures — $65 application, $257 original and renewal, $43 branch, $51 branch renewal, $26 re-examination — but that page is stamped 17 March 2014 and no more recent schedule was located.

Because the statute sets ceilings and the published schedule is a decade old, treat any specific dollar figure as provisional and confirm at the point of application.

The apprentice public adjuster fee is a live conflict. Section 15016(b)(4) states the applicant 'is required to pay a license fee of one hundred dollars ($100)'. The Department's own interim public adjuster page states a $264 filing fee. These do not reconcile on the face of the statute.

The bond is separate from the fees and is a condition of issue. Section 14050 requires a surety bond 'in the sum of two thousand dollars ($2,000) conditioned for the faithful and honest conduct of business by the applicant.' Public adjusters post $20,000 under section 15033.

The bond has an exemption cascade most people miss

Section 14050 does not require every adjuster to file a bond. No bond is needed for a licensed adjuster or employee adjusting 'on behalf of, and under the direction of, a licensee who is qualified as a manager and who has filed a surety bond or certificate of insurance', nor for one adjusting for an entity that has filed. The instrument must name everyone who may perform duties under it, and changes 'shall be made within 30 days.'

Renewal and the Two-Year Term

California does not use a birth month. Section 14090: 'Every license, branch office certificate, and pocket card issued pursuant to this chapter shall expire on the day two years after the last calendar day of the month in which the initial license was issued.'

So the term is measured from the month of issue, and it always ends on the last day of that month two years later. A license issued on 3 March expires on 31 March two years on, exactly as one issued on 28 March does.

There is a legacy rule for older licensees: those issued before 1 January 2011 expire 'on May 31 of each even-numbered year'.

Renewal is made on or before the expiration date, on the form the commissioner prescribes, with the fee.

The only late mechanism located in section 14097 is the delinquency fee at 50 percent of the renewal fee, capped at $72. No separate reinstatement fee appears in the statute.

Continuing education gates the renewal in practice, because the licensee must have completed the section 14090.1 hours for the biennium in conjunction with the renewal cycle.

Continuing Education

Section 14090.1 requires an individual holding an insurance adjuster license, and not exempt under subdivision (b), to 'satisfactorily complete a minimum of 24 hours, of which three hours are to be in ethics, of continuing education courses pertinent to the duties and responsibilities of an insurance adjuster license reported to the insurance commissioner on a biennial basis in conjunction with his or her license renewal cycle.'

Twenty-four hours, three of them ethics, biennially, tied to the renewal cycle. The three ethics hours sit inside the twenty-four.

There are three exemptions. First, a licensee 'not licensed for one full year prior to the end of the applicable continuing education biennium'. Second, a nonresident licensee who has met the continuing education requirements of 'his or her designated resident state'. Third, an individual licensed both as an insurance adjuster and as a property or casualty broker-agent under section 1625 who has met the section 1749.3 requirements — one set of hours covers both licenses.

Public adjusters carry an identical structure under section 15059.1: 24 hours, three in ethics, biennial, with parallel exemptions.

Note that the second exemption is what makes the designated resident state concept matter. A nonresident who satisfies their home state keeps the exemption; one who does not, does not.

Continuing education is only one of your training obligations

California imposes three separate training duties and they are cumulative, not substitutes. Continuing education under section 14090.1 has hours. The Fair Claims training and certification under 10 CCR 2695.6 has no hours but requires an annual certification under penalty of perjury by 1 September. And after a declared emergency, sections 14022(a)(2) and 14046(c) impose a fifteen-calendar-day read-and-understand duty. Earthquake training under 10 CCR 2695.42 is a fourth, imposed on insurers. Completing one does nothing for the others.

The Annual Certification Nobody Diaries

10 CCR 2695.6 is titled 'Training and Certification' and it is the obligation most likely to be missed, because it sits in the claims regulations rather than the licensing statute.

It requires insurers to 'adopt and communicate to all its claims agents written standards for the prompt investigation and processing of claims', within ninety days after the effective date of the regulations or any revision.

It then requires that 'All licensees shall provide thorough and adequate training regarding the regulations to all their claims agents', and that licensees certify their claims agents have been trained. Duly licensed attorneys are exempt from both the training and the certification.

For an individual licensee, the certification is personal and it is sworn: the licensee 'shall annually certify in writing under penalty of perjury that the licensee has read and understands the regulations'.

For an adjuster retained by an insurer under Insurance Code section 14021, there are two routes: the insurer trains and certifies, or 'the insurance adjuster may annually certify in writing, under penalty of perjury, that the insurance adjuster has read and understands these regulations and all amendments thereto or has successfully completed a training seminar which explains these regulations'.

The deadline is fixed and annual: 'the annual certification required by this subsection shall be completed on or before September 1 of each calendar year.'

The regulation specifies no number of hours. It is a knowledge-and-certification standard, not an hours standard, and any material assigning it an hour count is wrong.

Earthquake Training — Read Who It Binds

10 CCR 2695.42 requires earthquake claims training, and three things about it are routinely misstated.

First, it is not part of the Fair Claims Settlement Practices Regulations. It sits in a separate subchapter titled 'Insurance Adjuster Training for Evaluating Earthquake Damage', comprising sections 2695.40 through 2695.45, and its authority is Insurance Code section 10089.3 — the California Earthquake Authority statute — not section 790.03.

Second, it binds the INSURER, not the adjuster: 'Every insurer shall provide training regarding the handling of earthquake claims to insurance adjusters who evaluate earthquake claims for or on behalf of the insurer.' The insurer 'may provide the training directly or have the training provided by another entity.'

Third, the resulting accreditation is portable: 'An adjuster trained and accredited by one insurer shall be deemed accredited in order to adjust claims for a different insurer unless such insurer includes additional requirements.' It is a one-time accreditation you carry with you, not a recurring cycle.

The regulation prescribes eight content areas: the Fair Claims Settlement Practices Regulations themselves; determination of scope of loss; loss estimation techniques; determining the necessity for an engineer or expert; the Department's Earthquake Claims Mediation Program; assessment of damage to concrete surfaces and foundations, including distinguishing pre-existing from new cracks; subsequently discovered earthquake damage; and programs designed to assist earthquake victims.

The related recordkeeping rule, 10 CCR 2695.44, requires insurers or other training entities to keep records of adjusters completing the program for five years, and an insurer using an adjuster to evaluate earthquake damage to keep a record of that accreditation for five years.

No hour count exists in the earthquake regulation

Neither section 2695.42 nor the definitions in section 2695.41 states a number of hours. Commercial continuing education vendors market a five-hour earthquake course, and that figure appears nowhere in the regulation. Do not carry it into an answer as though it were law.

Emergency Registration — Who Actually Files It

Section 14022.5 is the mechanism that lets an unlicensed adjuster work a California catastrophe, and the most important thing about it is who does what.

Subdivision (a): 'In the event of an emergency situation as declared by the commissioner, claims arising out of the emergency, catastrophe, disaster, or other similar occurrence may be adjusted by a nonlicensed adjuster upon registration with the commissioner if all of the following requirements are met.'

The first requirement is supervision: the work must be 'under the active direction, control, charge, or management of a licensed adjuster or an insurer authorized to do business in this state.'

The second is the registration, and it is not filed by the adjuster: 'The licensee or insurer registers the nonlicensed adjuster with the commissioner no later than 15 calendar days from the date on which the nonlicensed adjuster began claims adjusting activity in California.' Subdivision (b) confirms it, defining registration as a notice 'submitted by the supervising licensed adjuster or admitted insurer', naming the nonlicensed adjusters and identifying any licenses they hold elsewhere.

The third is the one the adjuster does file personally: 'The nonlicensed adjuster submits to the commissioner a certification in a form or other format specified by the commissioner, under penalty of perjury, that the adjuster has read and understands the most recent notice and the handbook for adjusting disaster claims prepared by the department pursuant to subdivision (a) of Section 14046.'

The registration runs 180 days from the date of the registration letter, and before it lapses the commissioner may grant further 180-day extensions on written request from the supervising licensed adjuster or the admitted insurer.

And the whole scheme is switched off for carrier staff: subdivision (f) provides that the section 'does not apply to a nonlicensed adjuster who meets the criteria described in paragraph (1) of subdivision (a) of Section 14022.' The regime exists for the out-of-state surge workforce.

The certification is a validity condition, not paperwork

Section 14022.5(d) is four words long in substance and it decides everything: 'A registration is not valid unless a current certification is on file with the commissioner.' No current certification means no valid registration, which means the nonlicensed adjuster is working without the section 14022.5 authorization at all and is exposed under section 14020. Note the word CURRENT — the Department reissues the Notice annually, so this is a continuing obligation, not a one-time filing.

The Department's Annual Notice and Adjuster Handbook

Section 14046 requires the Department to produce two documents every year, and they are the documents the section 14022.5 certification attaches to.

Subdivision (a)(1): the Department shall annually prepare and deliver to every licensee and every admitted insurer 'a notice describing the most significant California laws pertaining to property insurance policies, including those related to a declared state of emergency, as defined in Section 8558 of the Government Code, or other emergency declared by a public official.'

Subdivision (a)(2): the Department shall also prepare and deliver 'a handbook for adjusting in California ... relevant to evaluating damage caused by an emergency, catastrophe, disaster, or other similar occurrence, including wildfires.'

Subdivision (b) creates a second and quite separate fifteen-day clock, and it belongs to the insurer: for a residential property claim arising from a declared state of emergency, the insurer shall give the claimant the most recent notice 'no later than 15 calendar days from the date on which the insurer received notice of the claim.'

Subdivision (c) makes the supervising licensed adjuster responsible for the reading duty, and reaches both registered nonlicensed adjusters and those exempt under section 14022(a).

Subdivision (d) requires the commissioner to make the notice, the handbook and the certification process accessible 'through a dedicated page on the department's internet website.'

The current editions of both documents are dated 9 January 2026.

Two fifteen-day clocks, different triggers and different actors

Section 14022.5(a)(2) gives the LICENSEE OR INSURER fifteen calendar days from the start of a nonlicensed adjuster's claims activity to register that adjuster. Section 14046(b) gives the INSURER fifteen calendar days from receiving notice of a residential emergency claim to give the CLAIMANT the Department's Notice. Same number, nothing else in common.

The Third-Adjuster Rule

Section 14047 was added in 2019 and addresses a complaint that recurs in every large catastrophe: the file that keeps changing hands.

It applies to a residential property claim arising from a state of emergency as defined in Government Code section 8558(a).

The trigger is a count. If within a six-month period the insurer assigns a third or subsequent adjuster to be primarily responsible for the claim, the insurer must, in a timely manner, provide the insured with a written status report, establish a primary point of contact, and provide one or more direct means of communication.

The duration is defined by outcome rather than by time: the primary point of contact 'shall remain assigned to the insured's claim until the insurer determines that the residential property claim is closed or litigation has been filed.'

And there is an escalation right. On request, the point of contact must refer or transfer the insured to 'a first-tier or second-tier manager with authority over claim handling.'

Chapter 3 and the Identification Badge

Division 5 chapter 3 is titled Emergency Disaster Assessment and it is almost never taught, but article 3 of it is squarely about adjusters in the field.

Section 16000 sets the trigger: 'As used in this chapter, state of emergency means a state of emergency or local emergency as defined in Section 8558 of the Government Code.'

Section 16020 requires the commissioner, 'in consultation with the Office of Emergency Services and other emergency service agencies', to 'establish a method for identification of representatives of insurers.'

Section 16021(a) is the operative provision: the commissioner issues identification badges to each insurer insuring property in the state, the insurer distributes them to appropriate representatives, and the badges 'shall permit access to disaster areas as soon as determined safe and practical by the incident commander.'

Subdivision (b) explains the purpose and imposes two limits. The badges let the incident commander and law enforcement identify insurer representatives for disaster-area access. They 'shall not be used as identification for other purposes'. And they must include 'in bold lettering larger than the other identifying information a statement that the bearer is not a state employee or public official, and does not possess any governmental authority.'

This chapter licenses no one. It is the physical access statute, and in a wildfire state it is the difference between reaching a loss and being turned away at a road closure.

There Is No Retention Period for You

California imposes no record retention period on the insurance adjuster licensee as such, and it is worth knowing exactly how that negative is established, because several five-year figures float around the state.

Section 14041 is the only records provision in the Insurance Adjuster Act: 'Each licensee shall maintain a record containing such information relative to his or her employees as may be prescribed by the commissioner.' It states no period.

10 CCR 2691.12, which implements it, sets a notification duty rather than a retention term: the licensee files a list of employees authorized to negotiate claim settlements with the application, and must inform the Commissioner in writing 'within 30 days from the date of the occurrence' of any employee hired or terminated afterwards.

Subchapter 7 of the regulations — the adjuster subchapter — has ten articles: Classification of Licensees, License Applications, License Examinations, Continuation of License Pending Qualification of New Manager, Information About Employees, Branch Office Requirements, Advertisements, two repealed articles, and Fees. There is no records article.

The five-year figures belong to insurers. 10 CCR 2695.3 requires claim files to be maintained 'for the current year and the preceding four years'. 10 CCR 2695.44 requires insurers and training entities to keep earthquake training and accreditation records for five years, under the authority of Insurance Code section 10089.3.

So the answer to how long a California adjuster must keep records is that no instrument says.

Two duties, two holders, two rules

The insurer's claim files run the current year plus four preceding. The adjuster's own retention obligation does not exist as a fixed term. If an answer offers a number of years for a California ADJUSTER, no number is right.

Grounds for Discipline

Section 14061 lists twelve grounds on which a license may be denied, suspended or revoked, and the list carries visible traces of the statute's private-investigator lineage.

The conventional grounds are there: making a false statement on an application, renewal or reinstatement; violating any provision of the chapter or any rule of the commissioner; conviction of a crime substantially related to the qualifications, functions and duties of the license; and committing any act that would be a ground for denial of an application.

So are some that are distinctly not insurance-flavored: impersonating, or permitting an employee to impersonate, a law enforcement officer or government employee; committing assault, battery or kidnapping, or using force or violence without proper justification; knowingly violating or advising or encouraging violation of a court order; acting 'as a runner or capper for any attorney'; and purchasing, possessing or transporting 'any tear gas weapon except as authorized by law'.

One ground is specific to lapsed licensees: committing, while the license was expired, an act that would be cause for suspension or revocation.

Another is about service: willfully failing or refusing to render agreed services or a report for which compensation was paid or tendered.

Section 14065 gives the commissioner a middle option — 'in lieu of suspending or revoking a license ... may impose a civil penalty not to exceed five hundred dollars ($500) upon a licensee, if the commissioner determines that a penalty better serves the purposes of this chapter.'

And section 14026.5 allows a restricted license in place of an unrestricted one, with 'any reasonable conditions'. The holder of a restricted license 'has no property right in it and the commissioner may, with or without either hearing or cause, suspend or revoke' it.

Section 790.03(h) and the Single Knowing Act

Section 790.03(h) enumerates sixteen unfair claims settlement practices, and the chapeau is the part that decides most questions: 'Knowingly committing or performing with such frequency as to indicate a general business practice any of the following unfair claims settlement practices.'

Read the conjunction. It is OR. A practice violates the statute either because it was committed knowingly on a single occasion, or because it was performed frequently enough to indicate a general business practice.

The Fair Claims regulations say exactly the same thing about themselves. 10 CCR 2695.1(a): section 790.03(h) 'enumerates sixteen claims settlement practices that, when either knowingly committed on a single occasion, or performed with such frequency as to indicate a general business practice, are considered to be unfair claims settlement practices'.

The sixteen practices include misrepresenting pertinent facts or policy provisions; failing to acknowledge and act reasonably promptly on communications; failing to adopt reasonable standards for prompt investigation; failing to affirm or deny coverage within a reasonable time after a completed proof of loss; not attempting in good faith to effectuate prompt, fair and equitable settlement where liability has become reasonably clear; compelling insureds to institute litigation by offering substantially less than amounts ultimately recovered; failing to provide promptly a reasonable explanation of the policy basis for a denial; directly advising a claimant not to obtain an attorney; and misleading a claimant as to the applicable statute of limitations.

The regulations also disclaim exclusivity: they 'are not meant to provide the exclusive definition of all unfair claims settlement practices. Other methods, act(s), or practices not specifically delineated in this set of regulations may also be unfair claims settlement practices.'

And 10 CCR 2695.1(b) imposes a knowledge duty on you personally: 'All licensees ... shall have thorough knowledge of the regulations contained in this subchapter.'

The asymmetry is knowledge, not frequency

Because the chapeau is disjunctive, there is no general business practice requirement in California — a single act suffices. But the single-act route carries a word the frequency route does not: KNOWINGLY. One knowing violation is enough; one inadvertent one is not, unless it is part of a pattern frequent enough to show a general business practice. That is the distinction to carry, and it is not the statute-versus-regulation distinction most material offers.

No Private Right of Action, and What Survives

California once had a private action for unfair claims practices, and then took it away. The sequence matters because material written in the interval is still circulating.

Royal Globe Insurance Co. v. Superior Court, Docket S.F. No. 23843, decided by the Supreme Court of California on 29 March 1979, held that a third-party claimant could sue an insurer for violating section 790.03(h), though not until the underlying action was concluded.

Moradi-Shalal v. Fireman's Fund Insurance Companies, Docket L.A. No. 32222, decided 18 August 1988, overruled it: 'For all the foregoing reasons, we have concluded Royal Globe ... should be overruled.'

But the same opinion preserved a great deal: 'The courts retain jurisdiction to impose civil damages or other remedies against insurers in appropriate common law actions, based on such traditional theories as fraud, infliction of emotional distress, and (as to the insured) either breach of contract or breach of the implied covenant of good faith and fair dealing.' Note the parenthetical — the contract and covenant theories belong to the insured; fraud and emotional distress are not so limited by that sentence.

Zhang v. Superior Court, Docket S178542, decided 1 August 2013, closed one more door and opened a narrow one. Closed: 'private UIPA actions are absolutely barred; a litigant may not rely on the proscriptions of section 790.03 as the basis for a UCL claim.' Opened: 'when insurers engage in conduct that violates both the UIPA and obligations imposed by other statutes or the common law, a UCL action may lie.'

So an insured may bring an Unfair Competition Law claim resting on independent grounds even where the same conduct also violates section 790.03 — but never a claim predicated on section 790.03 itself.

Enforcement of the statute belongs to the Commissioner. Section 790.035 authorizes a civil penalty 'not to exceed five thousand dollars ($5,000) for each act', rising to $10,000 'if the act or practice was willful', and gives the Commissioner 'the discretion to establish what constitutes an act.'

Zhang is confined to first-party claims and says so

The opinion states: 'Our holding here is confined to the first party context. Third party claims raise distinct analytical and policy issues.' Anyone describing Zhang as opening a third-party route under the Unfair Competition Law is overreading it. A third-party claimant reaches the insurer chiefly by assignment after an excess judgment, or through the insured's own failure-to-settle claim.

The Claim Clocks — All Calendar Days

Every deadline in the Fair Claims Settlement Practices Regulations is expressed in calendar days. There is no business-day deadline anywhere in the article, which is unusual and worth remembering as a single fact.

Twenty-one calendar days to respond to the Department. 10 CCR 2695.5(a): on receiving any written or oral inquiry from the Department of Insurance concerning a claim, every licensee shall 'immediately, but in no event more than twenty-one (21) calendar days of receipt of that inquiry, furnish the Department of Insurance with a complete written response based on the facts as then known by the licensee.'

Fifteen calendar days to respond to a claimant. 10 CCR 2695.5(b) applies to any communication from a claimant that reasonably suggests a response is expected, and does not apply after receipt of a notice of legal action.

Fifteen calendar days to acknowledge, provide forms and begin investigating. 10 CCR 2695.5(e) requires the insurer, on receiving notice of claim, to acknowledge receipt, provide necessary forms and instructions and reasonable assistance, and begin any necessary investigation.

Forty calendar days to accept or deny. 10 CCR 2695.7(b): 'Upon receiving proof of claim, every insurer ... shall immediately, but in no event more than forty (40) calendar days later, accept or deny the claim, in whole or in part.'

If more time is needed, written notice within that same forty days, specifying the additional information required and the continuing reasons for the delay — and then 'the written notice shall be provided every thirty (30) calendar days until a determination is made or notice of legal action is served.'

Thirty calendar days to pay. 10 CCR 2695.7(h): on acceptance in whole or in part and, where necessary, receipt of a properly executed release, the insurer shall 'immediately, but in no event more than thirty (30) calendar days later, tender payment or otherwise take action to perform its claim obligation.'

The acknowledgment does not have to be in writing

10 CCR 2695.5(e)(1) requires acknowledgment within fifteen calendar days 'unless payment is made within that period of time' — and then adds that where the acknowledgment is not in writing, a dated notation of it must be made in the insurer's claim file. An oral acknowledgment properly noted and dated complies. This is frequently taught the other way round, and it is the opposite of the DENIAL rule.

Denials Must Be in Writing

Where the acknowledgment may be oral, the denial may not.

10 CCR 2695.7(b)(1) covers first-party claims: 'Where an insurer denies or rejects a first party claim, in whole or in part, it shall do so in writing and shall provide to the claimant a statement listing all bases for such rejection or denial and the factual and legal bases for each reason given for such rejection or denial which is then within the insurer's knowledge.'

The same subsection separately reaches third parties: 'Every insurer that denies or rejects a third party claim, in whole or in part, or disputes liability or damages shall do so in writing.'

Read the two sentences carefully, because they are not identical. The WRITING requirement covers both first- and third-party denials. The requirement to list all bases and the factual and legal bases for each reason attaches, on the face of the text, to FIRST-PARTY denials.

The obligation to identify the policy provision relied on does not come from this regulation at all. It comes from the statute — section 790.03(h)(13), 'Failing to provide promptly a reasonable explanation of the basis relied on in the insurance policy, in relation to facts or applicable law, for denial or compromise.' Read together they get you to the same place, but the words are in different instruments.

Two related prohibitions sit nearby. 10 CCR 2695.7(l): 'No insurer shall deny a claim based upon information obtained in a telephone conversation or personal interview with any source unless the telephone conversation or personal interview is documented in the claim file.' And 10 CCR 2695.7(g): 'No insurer shall attempt to settle a claim by making a settlement offer that is unreasonably low.'

10 CCR 2695.7(d) sets the investigation standard the denial has to rest on: 'Every insurer shall conduct and diligently pursue a thorough, fair and objective investigation and shall not persist in seeking information not reasonably required for or material to the resolution of a claim dispute.'

You Must Warn Before the Clock Runs Out

10 CCR 2695.7(f) requires the insurer to warn a claimant that a time bar is approaching, and the periods are specific.

'Except where a claim has been settled by payment, every insurer shall provide written notice of any statute of limitation or other time period requirement upon which the insurer may rely to deny a claim. Such notice shall be given to the claimant not less than sixty (60) days prior to the expiration date.'

If the claim first arrives inside that window, the duty accelerates: 'if notice of claim is first received by the insurer within that sixty days, then notice of the expiration date must be given to the claimant immediately.'

For a first-party uninsured motorist matter the period is shorter: 'this notice shall be given at least thirty (30) days prior to the expiration date.'

And there is an exception that matters in practice: 'This subsection shall not apply to a claimant represented by counsel on the claim matter.'

The statutory counterpart is section 790.03(h)(15), which makes it an unfair practice to mislead a claimant as to the applicable statute of limitations. The regulation goes further and imposes an affirmative duty to speak.

Sixty, thirty, or immediately

Three periods in one subsection: sixty days generally, thirty days for a first-party uninsured motorist claim, and immediately where the claim is first noticed inside the sixty-day window. And none of it applies to a represented claimant.

How Far the Regulations Reach

The Fair Claims regulations reach third-party claimants, and this is where the private-action rules and the regulatory rules diverge in a way that confuses people.

The definitional move is in 10 CCR 2695.2, which defines 'claimant' to mean 'a first or third party claimant as defined in these regulations, any person who asserts a right of recovery under a surety bond, an attorney, any person authorized by operation of law to represent the claimant,' or a designated insurance adjuster, public adjuster or family member.

Because the operative duties are written to 'claimant', they apply to third parties: the fifteen-day response to communications, the fifteen-day acknowledgment and forms duty, the forty-day accept-or-deny, the thirty-day extension notices, the limitations warning, and the bar on unreasonably low offers.

The third-party denial writing requirement is express in 10 CCR 2695.7(b)(1).

Some provisions are first-party only: the itemized factual and legal bases sentence, the subrogation notification duty in 2695.7(p), and the whole of 2695.9 on residential and commercial property.

So a third-party claimant is owed regulatory duties by the insurer, and has no private action to enforce them. Those are different axes, and conflating them is the most common error in this area.

Common-Law Bad Faith

The tort survives Moradi-Shalal untouched, because it never depended on section 790.03 in the first place.

Gruenberg v. Aetna Insurance Co., Docket L.A. No. 30082, decided 11 June 1973, states the core: 'When the insurer unreasonably and in bad faith withholds payment of the claim of its insured, it is subject to liability in tort.'

Egan v. Mutual of Omaha Insurance Co., Docket L.A. No. 30747, decided 14 August 1979, adds the duty that decides most modern files: 'an insurer cannot reasonably and in good faith deny payments to its insured without thoroughly investigating the foundation for its denial.' You can be in bad faith for how you decided, not only for what you decided.

Egan is cited in the authority note of 10 CCR 2695.7 itself, which is a useful structural point: the claims regulation is expressly built on the bad-faith case law rather than sitting apart from it.

The working elements are that benefits due under the policy were withheld or delayed, and that the withholding was unreasonable or without proper cause. Tort liability attaches to the unreasonableness, not merely to the breach.

Limitations: the suit clause on a property policy is twelve months from inception of the loss under section 2071, extended to twenty-four where the loss relates to a declared state of emergency. The bad-faith tort itself is generally treated as carrying a two-year period, though that rests on practitioner consensus rather than on a holding this research could locate.

The tolling rule is the one to remember

Prudential-LMI Commercial Insurance v. Superior Court, Docket S011415, decided 1 November 1990, defines inception of loss as when appreciable damage occurs and 'is or should be known to the insured, such that a reasonable insured would be aware that his notification duty under the policy has been triggered' — and then tolls the period 'from the time an insured gives notice of the damage to his insurer, pursuant to applicable policy notice provisions, until coverage is denied.' The insurer's own investigation time does not burn the insured's clock. On a long wildfire claim that rule is worth more than the headline twelve months.

The Genuine Dispute Doctrine and Its Limits

The genuine dispute doctrine is the insurer's principal defense to a bad-faith claim, and it is narrower than its reputation.

Wilson v. 21st Century Insurance Co., Docket S141790, decided 29 November 2007, states the rule: an insurer denying benefits 'due to the existence of a genuine dispute with its insured as to the existence of coverage liability or the amount of the insured's coverage claim is not liable in bad faith.'

Then it states the limits, and they are the operative part. 'A genuine dispute exists only where the insurer's position is maintained in good faith and on reasonable grounds.'

And: 'The genuine dispute rule does not relieve an insurer from its obligation to thoroughly and fairly investigate, process and evaluate the insured's claim.' A dispute manufactured by an inadequate investigation is not a genuine dispute.

On summary judgment the court added that 'an insurer is not entitled to judgment as a matter of law where, viewing the facts in the light most favorable to the plaintiff, a jury could conclude that the insurer acted unreasonably.'

The practical consequence for an adjuster is that the doctrine protects a well-documented disagreement and does nothing for a poorly-investigated one. The quality of the file is what turns a dispute into a genuine dispute.

Third-Party Claims and the Duty to Settle

Where the insurer controls the defense and the settlement, it owes the insured a duty to consider the insured's interests in settling — and the consequence of getting it wrong is uncapped.

Comunale v. Traders & General Insurance Co., Docket L.A. No. 24975, decided 22 July 1958: 'when there is great risk of a recovery beyond the policy limits so that the most reasonable manner of disposing of the claim is a settlement which can be made within those limits, a consideration in good faith of the insured's interest requires the insurer to settle the claim.'

And the exposure: an insurer 'who wrongfully declines to defend and who refuses to accept a reasonable settlement within the policy limits in violation of its duty to consider in good faith the interest of the insured in the settlement, is liable for the entire judgment against the insured even if it exceeds the policy limits.'

Crisci v. Security Insurance Co., Docket S.F. No. 22433, decided 21 April 1967, locates the duty precisely: 'Liability is imposed not for a bad faith breach of the contract but for failure to meet the duty to accept reasonable settlements, a duty included within the implied covenant of good faith and fair dealing.'

Since 2023 the mechanics of a limits demand have been governed by statute. Code of Civil Procedure sections 999 to 999.5 apply to time-limited demands transmitted on or after 1 January 2023, in claims covered by 'automobile, motor vehicle, homeowner, or commercial premises liability insurance policies for property damage, personal or bodily injury, and wrongful death claims.'

Section 999.1 sets the required material terms. The acceptance period 'shall be not fewer than 30 days from date of transmission'. The demand must contain a clear and unequivocal offer to settle all claims within policy limits, an offer of a complete release for the insureds, the date and location of the loss, the claim number if known, a description of all known injuries, and 'Reasonable proof, which may include medical records or bills, sufficient to support the claim.'

Thirty days is a floor, not a ceiling

A time-limited demand within the statute must give at least thirty days from transmission. A demand giving less does not comply with section 999.1, which matters when the question later becomes whether the insurer had a reasonable opportunity to accept.

Brandt Fees Are Damages

Brandt v. Superior Court, Docket L.A. No. 31859, decided 28 January 1985, created a recovery that is often misdescribed as an attorney fee award. It is not one.

The holding: 'When an insurer's tortious conduct reasonably compels the insured to retain an attorney to obtain the benefits due under a policy, it follows that the insurer should be liable in a tort action for that expense.'

The Court analogized the fees to medical expenses in a personal injury case. They are an element of the plaintiff's damages caused by the insurer's tort, not a shifting of costs under a fee statute.

That conceptual point controls the limit. The fees 'may not exceed the amount attributable to the attorney's efforts to obtain the rejected payment due on the insurance contract. Fees attributable to obtaining any portion of the plaintiff's award which exceeds the amount due under the policy are not recoverable.'

And expressly excluded are 'attorney's fees qua attorney's fees, such as those attributable to the bringing of the bad faith action itself.'

The practical line: time spent getting the policy benefits paid is recoverable; time spent prosecuting the bad-faith tort is not.

Adjuster Personal Liability

This question has three settled answers in California rather than one, and which answer applies depends entirely on the tort pleaded.

Bad faith: no. Gruenberg v. Aetna, Docket L.A. No. 30082, decided 11 June 1973, held that 'The non-insurer defendants were not parties to the agreements for insurance; therefore, they are not, as such, subject to an implied duty of good faith and fair dealing,' and added that as agents and employees of the insurers they 'cannot be held accountable on a theory of conspiracy.' The implied covenant runs between parties to the contract, and an adjuster is not one.

Ordinary negligence: no. Sanchez v. Lindsey Morden Claims Services, Inc., Docket B123946, decided by the Court of Appeal on 19 May 1999, held that 'An independent adjuster engaged by an insurer owes no duty of care to the claimant insured, with whom the adjuster has no contract.' There is no liability for negligent claims handling causing purely economic loss.

Negligent misrepresentation: yes. Bock v. Hansen, Docket A136567, decided by the Court of Appeal on 2 April 2014, held that 'A cause of action for negligent misrepresentation can lie against an insurance adjuster.' The court distinguished Sanchez as involving negligence rather than negligent misrepresentation — different torts with different elements — while agreeing with Gruenberg that agents and employees of insurers do not owe the implied covenant.

Fraud and intentional infliction of emotional distress are preserved by Moradi-Shalal's own savings language, and Bock allowed an emotional distress count to be repleaded.

Note that Sanchez and Bock come from different appellate districts and that Bock distinguished rather than followed Sanchez. No citator pass was possible in preparing this material, so neither should be treated as beyond question.

What you SAY is the exposure, not how you evaluate

The comforting version of this rule — an adjuster cannot be sued personally for bad faith — is true and dangerously incomplete. Bad faith and ordinary negligence are foreclosed. Negligent misrepresentation is not. The risk in California attaches to statements made to a claimant about coverage, entitlement or process, rather than to the substantive claim decision. Say less, document more, and never characterize coverage you have not confirmed.

Punitive Damages

Civil Code section 3294 sets the standard and, unusually among large states, sets no cap.

The standard: punitive damages are available 'where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice'.

The definitions are demanding. Malice is 'conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.' Oppression is 'despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.' Fraud is 'an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.'

There is no dollar cap and no ratio cap in the statute.

For a corporate defendant, section 3294(b) adds a who requirement: the advance knowledge of unfitness, authorization or ratification 'must be on the part of an officer, director, or managing agent of the corporation.' Conduct by a line adjuster does not automatically expose the carrier to punitive damages; the question is whose knowledge or ratification is shown.

The absence of a statutory cap does not mean awards are unlimited in practice. Federal due-process review constrains the ratio between punitive and compensatory damages, and that constraint operates independently of the Insurance Code.

Pure Comparative Fault and Proposition 51

California compares fault rather than barring recovery. A plaintiff who is partly at fault recovers reduced damages rather than nothing, no matter how large the plaintiff's share.

That is the first half of the picture. The second half is how the remaining damages are allocated among defendants, and California splits it by category.

Civil Code section 1431.2, adopted as Proposition 51, provides that in an action for personal injury, property damage or wrongful death based upon comparative fault, the liability of each defendant for NON-ECONOMIC damages 'shall be several only and shall not be joint', with each defendant liable 'only for the amount of non-economic damages allocated to that defendant in direct proportion to that defendant's percentage of fault.'

Economic damages remain jointly and severally allocable. So a defendant found ten percent at fault can be pursued for the whole of the medical bills and lost earnings, but only for ten percent of the pain and suffering.

For an adjuster the practical consequence is that the two damage categories must be evaluated separately on a multi-defendant file, because exposure behaves differently for each.

Minimum Limits Changed in 2025

California raised its compulsory automobile liability limits for the first time in decades, and the change is recent enough that a great deal of published material is still wrong.

Vehicle Code section 16056 sets them. Through 31 December 2024 the minimums were $15,000 per person, $30,000 per accident for bodily injury, and $5,000 for property damage.

For any policy or bond issued or renewed on or after 1 January 2025 the minimums are $30,000 per person, $60,000 per accident, and $15,000 property damage.

A further step is already in the statute: for policies issued or renewed on or after 1 January 2035 the figures become $50,000, $100,000 and $25,000.

The enacting act is SB 1107, Statutes of 2022, chapter 717. Note the trigger — the new limits attach on issue or renewal, not on the calendar date alone, so a policy written in late 2024 carried the old limits until its next renewal.

California is a tort state. There is no personal injury protection scheme and no no-fault threshold; recovery depends on establishing fault, subject to the comparative fault rules above.

The trigger is issue or renewal

Section 16056 keys the increase to 'any policy or bond issued or renewed on or after January 1, 2025', not to the date of the accident. On an older policy the relevant question is when it last renewed.

There Is No Total Loss Percentage

Many states define a total loss by a percentage of value. California does not, and reading the section is the only way to see it.

Vehicle Code section 544 defines a total loss salvage vehicle as either of two things.

First: 'A vehicle, other than a nonrepairable vehicle, of a type subject to registration that has been wrecked, destroyed, or damaged, to the extent that the owner, leasing company, financial institution, or the insurance company that insured or is responsible for repair of the vehicle, considers it uneconomical to repair the vehicle and because of this, the vehicle is not repaired by or for the person who owned the vehicle at the time of the event resulting in damage.'

Second: 'A vehicle that was determined to be uneconomical to repair, for which a total loss payment has been made by an insurer, whether or not the vehicle is subsequently repaired,' provided the insurer obtained the claimant's agreement to the amount of the settlement and informed the claimant that the settlement must be reported to the Department of Motor Vehicles.

There is no percentage in the section. Not seventy-five, not eighty, not any number. The trigger is a qualitative economic judgment — considers it uneconomical to repair — combined with a conduct element: the vehicle is in fact not repaired, or a total loss payment was in fact made.

The title mechanics follow. Under Vehicle Code section 11515 the responsible party forwards the endorsed certificate of ownership, the license plates and a $15 fee to the Department of Motor Vehicles 'within 10 days from the settlement of the loss', whether or not the owner retains the vehicle, and the Department issues a salvage certificate.

Do not import a threshold from anywhere else

Because there is no statutory percentage, a California total loss determination is defensible or not on its own economics and its own documentation. An answer that supplies a percentage for California is importing a rule this state does not have.

The Auto Total Loss Settlement Rules

10 CCR 2695.8(b) prescribes how a first-party auto total loss is valued, and it is more directive than most states' rules.

The settlement is 'based upon the actual cost of a comparable automobile less any deductible provided in the policy', where a comparable automobile is one 'of like kind and quality, made by the same manufacturer, of the same or newer model year, of the same model type, of a similar body type, with options and mileage similar to the insured vehicle.'

Two methods are prescribed. Where comparable automobiles 'are available or were available in the local market area in the last 90 days', use 'the average cost of two or more such comparable automobiles'. Where they were not, use 'the average of two or more quotations from two or more licensed dealers in the local market area.'

Taxes and fees are treated in two different ways in the same sentence, and the distinction is examinable. The insurer pays 'all applicable taxes and one-time fees incident to transfer of evidence of ownership of a comparable automobile' in full, plus 'the license fee and other annual fees to be computed based upon the remaining term of the loss vehicle's current registration.' One-time charges in full; annual charges pro-rated.

Where the owner retains the salvage, the settlement includes 'the sales tax associated with the cost of a comparable automobile, discounted by the amount of sales tax attributed to the salvage value of the loss vehicle.'

Condition deductions are constrained: the actual cost of a comparable automobile 'shall not include any deduction for the condition of a loss vehicle unless the documented condition of the loss vehicle is below average', though the rule 'shall not preclude deduction for prior and/or unrelated damage'. And in every case, 'Any adjustments shall be discernable, measurable, itemized, and specified as to dollar amount, and shall accurately reflect the value of the betterment or depreciation.'

On repairs, the estimate must 'allow for repairs to be made in accordance with accepted trade standards for good and workmanlike automotive repairs', and an insurer specifying non-original equipment crash parts 'warrants that such parts are at least equal to the original equipment manufacturer parts.'

Actual Cash Value and What May Be Depreciated

Insurance Code section 2051 sets the measure of indemnity for fire insurance, and its second subdivision contains a limit that is unusual and frequently overlooked.

Under an open policy requiring payment of actual cash value, the measure 'shall be the amount it would cost the insured to repair, rebuild, or replace the thing lost or injured less a fair and reasonable deduction for physical depreciation based upon its condition at the time of the injury or the policy limit, whichever is less.'

Then the limit: 'A deduction for physical depreciation shall apply only to components of a structure that are normally subject to repair and replacement during the useful life of that structure.'

That sentence rules out depreciating the structural elements. Roofing, finishes and mechanical components are normally subject to repair and replacement across a building's life; framing and foundations are not.

The provision was added by AB 188 in 2019 and took effect 1 January 2020.

Under a replacement cost policy, section 2051.5(a) makes the measure 'the amount that it would cost the insured to repair, rebuild, or replace the thing lost or injured, without a deduction for physical depreciation, or the policy limit, whichever is less.'

California Has a Matching Regulation

Many states have no matching rule and leave the question to policy language. California regulates it directly, and the regulation is short enough to know by heart.

10 CCR 2695.9(a)(2): 'When a loss requires replacement of items and the replaced items do not match in quality, color or size, the insurer shall replace all items in the damaged area so as to conform to a reasonably uniform appearance.'

Four elements decide its application. The trigger is a mismatch in quality, color OR size — any one is enough. The obligation is to replace all items in the damaged area. The standard is a reasonably uniform appearance, which is not identical and not perfect. And the scope is the damaged area, which is the principal limiting term and the one most disputes turn on.

The companion provision covers what the repair itself breaks. 10 CCR 2695.9(a)(1): 'When a loss requires repair or replacement of an item or part, any consequential physical damage incurred in making the repair or replacement not otherwise excluded by the policy shall be included in the loss.' And: 'The insured shall not have to pay for depreciation nor any other cost except for the applicable deductible.'

Read together, the two paragraphs cover access and tear-out damage on the one hand and appearance on the other, and neither may be charged to the insured beyond the deductible.

The damaged area is the argument

Because the duty is to conform the DAMAGED AREA to a reasonably uniform appearance, most matching disputes are really disputes about how the damaged area is defined. Document the boundary of the area and the basis for it; that is the part of the file the regulation actually tests.

The Standard Form Fire Policy

California prescribes the standard form fire policy by statute, at Insurance Code section 2071, so its terms are law rather than contract.

The suit clause: 'No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within 12 months next after inception of the loss. If the loss is related to a state of emergency, as defined in subdivision (b) of Section 8558 of the Government Code, the time limit to bring suit is extended to 24 months after inception of the loss.'

Twelve months ordinarily, twenty-four where the loss relates to a declared state of emergency. The extension was added by AB 2594 in 2018.

The appraisal clause carries two provisions that decide how disputes are resolved. First, appraisal is statutorily informal: 'Appraisal proceedings are informal unless the insured and this company mutually agree otherwise. For purposes of this section, informal means that no formal discovery shall be conducted, including depositions, interrogatories, requests for admission, or other forms of formal civil discovery, no formal rules of evidence shall be applied, and no court reporter shall be used for the proceedings.'

Second, and critically in a wildfire year: 'In the event of a government-declared disaster, as defined in the Government Code, appraisal may be requested by either the insured or this company but shall not be compelled.'

The mechanics: each side selects a competent and disinterested appraiser and notifies the other within twenty days of the request; the appraisers select an umpire and, 'failing for 15 days to agree upon the umpire', a judge of a court of record selects one; and 'An award in writing, so itemized, of any two when filed with this company shall determine the amount of actual cash value and loss.' Each appraiser is paid by the party selecting them and umpire and appraisal expenses are shared equally.

In a declared disaster, appraisal cannot be compelled

The clause is easy to read past. Appraisal remains available to either party by request, but neither can force the other into it once a government-declared disaster is in play. On a wildfire file that changes the whole dispute-resolution posture, and it is a fair examination question precisely because the rest of the clause reads so conventionally.

No Mandatory Valued Policy Law

California has no valued policy law in the sense that phrase usually carries — no statute compels an insurer to pay the face amount on a total loss.

But it is not accurate to say the state has no valued policy law at all, and the distinction is worth carrying because both statements appear in circulation.

Section 412 defines the category: 'A valued policy is one which expresses on its face an agreement that the thing insured shall be valued at a specified sum.' It is a description of a type of policy, not a mandate.

Section 2051(a) frames the fire measure of indemnity as applying 'Under an open policy', which tells you what the default is: the open, indemnity-based policy.

Section 2052 then creates an elective mechanism, initiated by the insured and paid for by the insured: 'Whenever the insured desires to have a valuation named in his policy insuring any building or structure against fire, he may require such building or structure to be examined by the insurer and the value of the insured's interest therein shall be fixed at that time by the parties. The cost of the examination shall be paid by the insured.'

Section 2053 completes it with a labeling rule: 'A clause shall be inserted in such a valued policy, stating substantially that the value of the insured's interest in the insured building or structure has been thus fixed.'

The operative word throughout is may. California offers a valued policy; it does not impose one.

The Emergency Clocks, Rewritten for 2026

A declared state of emergency changes almost every deadline on a residential property claim, and the figures were rewritten effective 1 January 2026.

Replacement cost. Section 2051.5 bars an insurer from imposing 'a time limit of less than 12 months from the date that the first payment toward the actual cash value is made' to collect full replacement cost. Where the loss relates to a declared state of emergency the floor is 'less than 36 months'. And the insurer must 'provide to a policyholder one or more additional extensions of six months for good cause' where delay is beyond the insured's control — permits, materials, contractor availability.

Proof of loss. In an emergency the insurer 'shall not require the insured to provide proof of loss less than 100 days after the loss', with 'additional extensions of three months for submission of proof of loss for good cause'.

Rebuilding elsewhere. Section 2051.5(c) prevents the policy limiting or denying payment because the insured rebuilds at a different location, though 'the measure of indemnity shall not exceed the replacement cost' at the original location.

Additional living expenses. Section 2060 provides that in a declared emergency 'coverage for additional living expenses shall be for a period of no less than 24 months from the inception of the loss', extendable by 'up to 12 additional months, for a total of 36 months' where the insured acting in good faith and with reasonable diligence encounters delays beyond their control, and then 'Additional extensions of six months shall be provided to policyholders for good cause.' Where the loss is a loss of access by civil authority outside an emergency, coverage runs 'for at least two weeks', extendable in two-week increments.

Advance living expenses. Section 2061(a)(1): 'an insurer shall, upon request by an insured, render an advance payment of no less than four months of living expenses.'

Premium grace. Section 2062 requires a sixty-day grace period for premium payment on residential property policies in the affected area following a declared emergency.

The inventory rules changed how contents claims are built

Section 2061 bars an insurer from requiring a company-specific inventory form 'if the insured can provide an inventory using a form that contains substantially the same information', and requires the insurer to accept 'an inventory that includes groupings of categories of personal property, including clothing, shoes, books, food items, CDs, DVDs, or other categories of items for which it would be impractical to separately list each individual item claimed.' Demanding an item-by-item list for an entire destroyed household is not compliant.

Sixty Percent With No Inventory

Section 10103.7, as amended by SB 495 in 2025, is the provision that most changes day-to-day handling of a total loss claim, and it carries two dates.

The core obligation: 'In the event of a covered total loss of a primary dwelling under a residential property insurance policy resulting from a state of emergency, the insurer shall offer a payment under the contents (personal property) coverage in an amount no less than 60 percent of the policy limit applicable to the personal property covered under the policy, up to a maximum of three hundred fifty thousand dollars ($350,000).'

That payment is made without an itemized inventory. The insurer may require an attestation that the residence was furnished and that the values claimed are reasonable.

The insured does not give anything up by taking it. The section requires that 'When an insured files a claim relating to a state of emergency, the insurer shall notify the insured of the option to receive payment for loss of contents and of the insured's option to subsequently file a full itemized claim.'

The same section also permits combining limits: an insured 'shall be permitted to combine payments for claims for losses up to the policy limits for the primary dwelling and other structures' where the loss relates to a declared state of emergency.

Now the dates. The act took effect 1 January 2026. But the section contains its own compliance clause: 'On and after July 1, 2026, all policy forms issued or renewed by an insurer shall comply with this section in its entirety.' Both dates have now passed.

The figure changed. Material describing a thirty percent contents advance is describing the pre-2026 rule.

One act, two operative dates, and no code mirror flags the second

The 1 January 2026 date is the act's general effective date and is what commercial code reproductions show. The 1 July 2026 date lives inside section 10103.7 itself and governs policy-form compliance. A source that carries only the January date is not wrong, but it is incomplete in a way that matters for any form question.

The Post-Wildfire Moratorium

Section 675.1 bars cancellation and nonrenewal after a wildfire, and its geographic reach is broader than most people expect.

The trigger is a declaration of a state of emergency based on a wildfire. The duration is one year from the declaration.

The scope: an insurer 'shall not cancel or refuse to renew a policy of residential property insurance for a property located in any ZIP Code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency'. Note within OR ADJACENT TO — the protection extends past the burn area itself.

The limitation on the basis: the bar applies where the action is 'based solely on the fact that the insured structure is located in an area in which a wildfire has occurred'. It is not a general bar on cancellation for other grounds.

The mechanics matter operationally. The fire perimeter 'shall be determined by the Department of Forestry and Fire Protection in consultation with the Office of Emergency Services', and then 'The commissioner shall then issue a bulletin to inform insurers which ZIP Codes are subject to this subdivision.'

So the operative list of protected ZIP codes is in a Department bulletin, not in the statute. Those bulletins are a recurring instrument, issued one per declared emergency — there were eight in 2024, five in 2025, and one so far in 2026.

There is a separate and longer duty after a total loss. Section 675.1(a): where the total loss to the primary insured structure was caused by a disaster, the insurer 'shall offer, for at least the next two annual renewal periods, but no less than 24 months of coverage from the date of the loss, to renew the policy.'

Check the bulletin, not the statute

Because the ZIP code list is delegated to a commissioner's bulletin, the statute alone cannot tell you whether a given property is protected. The bulletins are indexed on the Department's website and each one names the fires and the ZIP codes it covers.

Cancellation and Nonrenewal

Section 678 sets the nonrenewal notice period for property policies subject to section 675: 'At least 75 days before the policy expiration, the insurer shall deliver the notice of nonrenewal to the named insured or mail the notice of nonrenewal to the named insured at the address shown in the policy.'

Section 676 limits the grounds on which such a policy may be canceled once it has been in effect for sixty days, or immediately if it is a renewal. The permitted grounds are nonpayment of premium; conviction of the named insured of a crime having as an element an act increasing a hazard; discovery of fraud or material misrepresentation by the insured in obtaining the insurance or in pursuing a claim; discovery of grossly negligent acts or omissions substantially increasing a hazard; and physical changes in the property that render it uninsurable.

Note the third ground. Fraud or material misrepresentation 'in obtaining the insurance or pursuing a claim' is a cancellation ground, which links claims handling directly to underwriting action.

For automobile policies the periods are shorter — twenty days for cancellation, ten for nonpayment, and thirty for nonrenewal.

SB 547, effective 1 January 2026, extended the nonrenewal moratorium protections from residential to commercial policies, reaching businesses, homeowners associations, condominiums, affordable housing and non-profits.

Smoke and Ash — Guidance, Not Regulation

Smoke and ash claims are the most contested area of California property adjusting at present, and it is important to be precise about what is law and what is not.

As of August 2026 there is no adopted California statute or regulation establishing standards for smoke or ash inspection, sampling, testing or remediation. The general rules apply — the measure of indemnity, the matching regulation, the claims deadlines — but there is no smoke-specific instrument in force.

What exists is Department guidance. Bulletin 2025-7 addresses insurance coverage for smoke damage and the proper handling of smoke damage claims for properties in or near wildfire areas. Bulletin 2025-2 covers wildfire consumer protections and advanced payments. Bulletin 2025-3 addresses coverage of flood, mudslide and earth movement claims relating to the wildfires. An Agent and Broker Alert of 11 March 2025 records the Commissioner ordering insurers to fully investigate smoke damage claims.

A Smoke Claims and Remediation Task Force was established in 2025 and issued a report. The Department's own page describes its output as proposals rather than enforceable requirements.

Legislation is pending. AB 1795, the Smoke Damage Recovery Act, would add Insurance Code sections 2060.1, 2060.2, 14048 and 15009.2 and Health and Safety Code section 25405, establishing statewide protocols for inspection, sampling and testing, requiring remediation to pre-loss condition, imposing a thirty-day inspection timeline, and barring termination of additional living expenses until a home is cleared as safe.

It passed the Assembly 56 to 7 on 8 June 2026 with an urgency clause adopted and is in Senate Appropriations. It is not law.

The urgency clause makes this a live publication risk

An ordinary California bill chaptered in 2026 takes effect the following 1 January. AB 1795 carries an urgency clause, which means that if it is chaptered it takes effect immediately. It would also add section 14048 inside the adjuster division and sections 2060.1 and 2060.2 inside the additional living expense cluster, so it touches this material in two places. Verify its status before relying on the absence of smoke standards.

The FAIR Plan and Residual Market

The California FAIR Plan Association is the state's residual property market, established under Insurance Code section 10090 and following.

The statutory purposes are 'To assure stability in the property insurance market for property located in the State of California', 'To assure the availability of basic property insurance as defined by this chapter', and 'To encourage maximum use, in obtaining basic property insurance, of the normal insurance market provided by admitted insurers and licensed surplus line brokers.'

What it writes is basic property insurance — a fire and specified-perils product rather than a full homeowners policy. That distinction drives a great deal of claim friction, because an insured with a FAIR Plan policy and a companion difference-in-conditions policy has two carriers and two coverage grants for one loss.

The limits have risen substantially. As presented by the Plan's president to the Assembly Insurance Committee on 28 January 2026: a dwelling limit of $3,000,000, completed in 2022; a commercial per-building limit of $20,000,000, completed in 2023; and a commercial per-location limit of $100,000,000, completed in 2025.

The scale is now material to the market as a whole. As of December 2025 the Plan reported total exposure of $724 billion across 668,609 policies in force.

Four 2025 acts changed how it operates, all effective 1 January 2026: AB 226 gave it access to catastrophe bonds and lines of credit to fund claims, AB 234 changed its governing committee, AB 290 addressed automatic payments, and SB 525 addressed manufactured homes.

The Guaranty Association

The California Insurance Guarantee Association pays covered claims of insolvent property and casualty insurers, and its limits are more layered than a single figure.

Section 1063.1(c)(7) sets the general cap: covered claims do not include the portion of a claim 'other than a claim for workers compensation benefits, that is in excess of five hundred thousand dollars ($500,000).'

There is a higher cap for dwellings: 'a claim for damage to, or loss of, a dwelling structure under a policy of residential property insurance shall not exceed one million dollars ($1,000,000) or the amount recoverable under the policy, whichever is less.'

And workers' compensation benefits are carved out of the cap entirely. So the answer to what the cap is depends on what kind of claim it is: five hundred thousand generally, one million for a dwelling structure, and uncapped for workers' compensation.

The hundred-dollar figure in the statute is not a deductible. Section 1063.1(c)(6) provides that covered claims, except workers' compensation and unearned premium claims, do not include 'a claim in an amount of one hundred dollars ($100) or less'. That is a floor. A claim of ninety dollars is not covered at all; a claim of one hundred and fifty dollars is covered in full, not reduced by a hundred.

The exclusions are unusually broad. Life, annuity, health and disability insurance; mortgage guaranty, financial guaranty and other protection against investment risks; fidelity and surety insurance, including bonds; credit insurance; title insurance; ocean marine; claims servicing agreements and retroactive insurance of a known loss; reinsurance; obligations to state or federal government; obligations to insurers and pools; and punitive or exemplary damages.

The association is also the payer of last resort: claims covered by other available insurance are excluded, as are claims of assignees rather than original claimants.

A floor is not a deductible

This is the single most common error about the association. The hundred dollars operates as a threshold below which nothing is covered, not as an amount subtracted from every payment. If an answer offers five hundred thousand less a hundred dollars, the subtraction half is wrong.

Fraud Reporting and the Two Warnings

Section 1872.4 imposes the reporting duty, and the clock runs from an event that is within the insurer's own control.

A company that 'reasonably suspects or knows an act of insurance fraud may have occurred' must send the Fraud Division the information requested, on the prescribed form, 'within 60 days after that determination by the insurer.'

The sixty days therefore runs from the determination of reasonable suspicion — not from the date of loss, not from the date of the claim, and not from the discovery of the underlying facts.

There are two statutory fraud warnings, with different text and different scope, and material regularly blurs them.

Section 1871.2 applies to applications, amendments to coverage AND claim forms, and reads: 'Any person who knowingly presents false or fraudulent information to obtain or amend insurance coverage or to make a claim for the payment of a loss is guilty of a crime and may be subject to fines and confinement in state prison.' It excludes reinsurance contracts.

Section 1879.2 applies to claim forms, and reads: 'Any person who knowingly presents a false or fraudulent claim for the payment of a loss is guilty of a crime and may be subject to fines and confinement in state prison.'

Both are introduced by wording to the effect that 'For your protection California law requires the following to appear on this form', and both must appear in comparative prominence to the other contents. Neither prescribes a point size.

Section 1872.5 gives immunity for furnishing information about suspected fraud to law enforcement, licensing officials or the Department — but the immunity is conditioned on the information being given without malice. And section 1875.20 requires every admitted insurer to 'provide for the continuous operation of a unit or division to investigate possible fraudulent claims.'

No point size, and do not borrow one

The fraud warnings require comparative prominence, not a stated type size. The 10-point requirement people sometimes attach to them belongs to section 10102 and the Residential Property Insurance Disclosure, which is a different document with a different purpose.

Workers' Compensation

California workers' compensation carries its own deadlines, its own penalty regime and — uniquely among the states in this library's scope — two separate mandatory competency requirements for the people who adjust the claims.

The rates move every 1 January. For 2026 the maximum temporary total disability rate is $1,764.11 per week and the minimum is $264.61, derived from a state average weekly wage of $1,789, under Labor Code section 4453(a)(10). Those figures were published by the Division of Workers' Compensation in November 2025 and took effect 1 January 2026.

The waiting period is three days under Labor Code section 4652, waived where temporary disability continues more than fourteen days or the employee is hospitalized as an inpatient, in which case indemnity is payable from the date of disability.

Notice to the employer is due within thirty days under section 5400. The employer must provide a claim form within one working day of notice or knowledge under section 5401. The limitations period is one year under section 5405. The first temporary disability payment is due within fourteen days after knowledge of injury and disability under section 4650, and a late payment 'shall be increased 10 percent and shall be paid, without application, to the employee.'

The accept-or-deny deadline is ninety days and the consequence of missing it is severe. Section 5402(b)(1): 'If liability is not rejected within 90 days after the date the claim form is filed under Section 5401, the injury shall be presumed compensable under this division.' For the presumptive injuries defined in sections 3212 to 3212.85 the period is seventy-five days.

Meanwhile treatment must be authorized immediately: section 5402(c) requires the employer, 'Within one working day after an employee files a claim form', to authorize all treatment, and provides that 'Until the date the claim is accepted or rejected, liability for medical treatment shall be limited to ten thousand dollars ($10,000).'

Comp bad faith is not available. Charles J. Vacanti, M.D., Inc. v. State Compensation Insurance Fund, Docket S071945, decided 4 January 2001, holds such claims within the exclusivity provisions, with Labor Code section 5814 as the exclusive remedy: the delayed payment 'shall be increased up to 25 percent or up to ten thousand dollars ($10,000), whichever is less', with a ten percent self-imposed alternative if paid within ninety days of discovery, and a two-year limitations period.

Two mandatory competency regimes, two agencies, neither a license

10 CCR 2592 and following, promulgated by the Department of Insurance, requires 160 hours of training for a workers' compensation claims adjuster, of which 120 must be in a classroom with an instructor, and 80 hours with 50 classroom for a medical-only adjuster, plus 30 hours of post-designation training every two years and 20 for medical-only. Five years of California comp adjusting experience within the past eight substitutes for the initial training. It is an employer-conferred designation certified annually to the Commissioner, not a license. Separately, 8 CCR 15452 requires self-insured claims to be adjusted under the direct supervision of a person who has passed the self-insurance administrator's examination, administered by the Department of Industrial Relations. The definition in 10 CCR 2592.01 reaches 'an employee or agent of an entity that is not an insurer', which captures third-party administrator staff adjusting on an insurer's behalf.

Reading California Law Without Getting Burned

California is a two-year-session state. The 2025-2026 Regular Session convened in December 2024 and adjourns 30 November 2026, so bills introduced in 2025 carry over into 2026.

In the second year the key dates are 31 January for each house to pass its own odd-year bills, 31 August for each house to pass bills, and 30 September for the Governor to sign or veto. A bill chaptered in 2026 generally takes effect 1 January 2027 unless it carries an urgency clause.

That calendar means the live exposure for current material is not the 2026 session. It is the tranche that took effect 1 January 2026 — SB 495 and the FAIR Plan package among them — which commercial code reproductions do carry but which many practitioners have not absorbed.

There is no usable forward index for the current biennium, and the reason is structural rather than a matter of access. The official Table of Sections Affected is compiled per biennium after that biennium closes, so the newest published volume covers 2023-2024 and the 2025-2026 volume cannot exist before roughly 2027.

What is available instead is a code-scoped bill list on the Legislature's own site, which returns every Insurance Code bill of the biennium — 146 of them, of which 31 were chaptered. That is exhaustive as to acts touching the Insurance Code but is not keyed to sections.

The practical lesson is that a bill's title tells you very little. AB 487, approved 10 October 2025, is titled simply 'Insurance', amends more than twenty sections, and none of them is in Division 5 — yet it changed the law for adjuster applicants by adding insurance adjuster and public insurance adjuster licenses to the automatic-denial provision in section 1652, in an entirely different division.

One more caution about the regulations. The Fair Claims Settlement Practices Regulations are old — the last substantive amendment became operative 30 August 2006 — and a tranche of 2003 amendments was enjoined and depublished under a court-approved settlement in 2004. Material printed in 2003 or 2004 may quote regulatory text that never took effect.

Three questions to ask of any California source

Has this source seen the 1 January 2026 tranche, and does it carry the 1 July 2026 policy-form date? Does the instrument I am reading print a history line, or only the publisher's own stamp? And is the regulation I am relying on one that a court enjoined in 2003? Those three questions catch nearly every currency error in this state.

See where you stand — free

Take a free California Adjuster practice exam with real-format questions.

Start Free →

Quick Reference

Licensing AuthorityCalifornia Department of Insurance (CDI)

Governing StatuteIns. Code Division 5, ch. 1 — Insurance Adjuster Act, §§ 14000-14099

Public Adjuster StatuteIns. Code Division 5, ch. 2 — Public Insurance Adjusters Act, §§ 15000-15062

Disaster Access StatuteIns. Code Division 5, ch. 3 — Emergency Disaster Assessment, §§ 16000-16032

License ClassesAJ Insurance Adjuster (Independent) · PJ Public Insurance Adjuster · CR Crop · PI Interim Public

Does California license independent adjusters?YES — the belief that it does not is the state's most common error

License Required§ 14020

Definition§ 14021 — a person OTHER THAN a private investigator under B&P § 7521

Exemptions§ 14022 — eleven lettered categories plus the emergency exception

Staff AdjustersEXEMPT — § 14022(a)(1), employed exclusively and regularly by one employer

Experts and ContractorsEXEMPT — § 14022(k), if they do not otherwise participate in adjusting

Qualifications§ 14025 — a CLOSED LIST OF FOUR

Minimum Age18

Experience RequiredTWO YEARS adjusting claims, or the equivalent as determined by the commissioner

Experience Conversion2,000 compensated hours = one year — CDI practice, not statute

Prelicensing — AdjusterNONE. § 14025 has no education element and CDI's prelicensing page has no adjuster entry

Prelicensing — Public Adjuster20 HOURS — § 15009.1(a), applied to apprentices by § 15016(b)(12)

Exam Authority§ 14026 — permissive; the Commissioner has exercised it

Exam OwnerCDI writes the objectives and sets the cut score

Exam VendorPSI Services, LLC — delivered at CDI sites AND PSI test centers

Exam Questions100 multiple choice

Passing Score70 percent

Exam Time — CDI2 hours 30 minutes (CDI examination objectives)

Exam Time — PSI158 minutes (PSI candidate information bulletin) — an unreconciled 8-minute difference

Exam FeeNot published in any CDI or PSI document located

Re-examination Fee Cap$29 — § 14097(g)

Fingerprints§ 14024(a)(7) — two photographs and two classifiable sets of fingerprints

Fingerprint StandardB&P § 480 denial grounds, imported by § 14025(b)

Fingerprint Vendor — ResidentCapital Live Scan, effective 14 Feb 2025 — $74 (agency practice, not law)

Fingerprint Vendor — NonresidentAccurate Biometrics — $75 (agency practice, not law)

Bond — Adjuster$2,000 — § 14050

Bond — Public Adjuster$20,000 — § 15033

Bond ExemptionNone required under a qualified manager or entity that has filed; changes within 30 days

Application Fee Cap$72 — § 14097(a)

Renewal Fee Cap$283 — § 14097(d)(1)

Branch Office Fee Caps$47 application, $56 renewal — § 14097(b), (d)(2)

Delinquency Fee50% of the renewal fee, maximum $72 — § 14097(f)

Published CDI Fee ScheduleStamped 17 March 2014 — no current schedule located

License TermTWO YEARS from the last calendar day of the month of initial issue — § 14090

Pre-2011 LicensesExpire 31 May of each even-numbered year

CE Hours24 biennially, of which 3 in ethics — § 14090.1

CE — Public Adjuster24 biennially, 3 ethics — § 15059.1

CE ExemptionsFirst partial term; designated resident state reciprocity; dual adjuster and broker-agent licensees

Fair Claims CertificationANNUAL, under penalty of perjury, on or before 1 SEPTEMBER — 10 CCR 2695.6

Fair Claims Training HoursNONE SPECIFIED — 2695.6 is a knowledge and certification standard

Earthquake Training10 CCR 2695.42 — binds the INSURER; accreditation is PORTABLE between insurers

Earthquake Training HoursNONE SPECIFIED in the regulation — the marketed 5-hour figure has no legal source

Earthquake Training AuthorityIns. Code § 10089.3 — NOT § 790.03, and NOT part of the Fair Claims article

Emergency Registration Statute§ 14022.5

Who RegistersTHE LICENSEE OR INSURER — not the adjuster

Registration Deadline15 calendar days from the start of claims adjusting activity

What the Adjuster FilesA certification UNDER PENALTY OF PERJURY — § 14022.5(a)(3)

Certification EffectA registration is NOT VALID without a current certification — § 14022.5(d)

Registration Term180 days, extendable in further 180-day increments

Emergency Scheme ExcludesStaff adjusters exempt under § 14022(a)(1) — § 14022.5(f)

Second 15-Day Clock§ 14046(b) — the INSURER gives the claimant the Notice within 15 days of claim notice

Annual Notice and Handbook§ 14046 — current editions both dated 9 January 2026

Single Point of Contact§ 14047 — triggered by a THIRD adjuster within six months on an emergency claim

Disaster Badges§ 16021 — permit access as determined by the incident commander

Badge WordingMust state in bold larger lettering that the bearer is not a state employee or public official

Record Retention — AdjusterNONE. § 14041 states no period; Subchapter 7 has no records article

Record Retention — InsurerCurrent year plus four preceding — 10 CCR 2695.3

Employee Roster30-day notification of hire or termination — 10 CCR 2691.12

Grounds for DisciplineTwelve — § 14061

Civil Penalty in LieuUp to $500 — § 14065

Unfair Practices Statute§ 790.03(h) — SIXTEEN enumerated practices

General Business Practice Required?NO — in EITHER instrument. Both are disjunctive

Single Act LiabilityYES, if committed KNOWINGLY

Frequency RouteDoes NOT require knowledge — that is the real asymmetry

Claims Regulations10 CCR §§ 2695.1-2695.14

Repealed Regulations§§ 2695.15, 2695.16, 2695.17 — still served by some mirrors

Day ConventionCALENDAR — there is NO business-day deadline in the Fair Claims Regulations

Department Inquiry21 calendar days

Claimant Communication15 calendar days

Acknowledge Notice of Claim15 calendar days — and it need NOT be in writing if noted and dated in the file

Provide Forms and Begin Investigation15 calendar days

Accept or Deny40 calendar days from proof of claim

Extension NoticeWithin the 40 days, then every 30 calendar days

Tender Payment30 calendar days from acceptance

Limitations Warning60 days before expiry; 30 days for first-party uninsured motorist; immediately if noticed inside the window

Limitations Warning ExceptionDoes not apply to a claimant represented by counsel

Denial in WritingREQUIRED — first AND third party

Itemized Factual and Legal BasesFIRST PARTY only, on the face of 2695.7(b)(1)

Policy Provision ExplanationFrom the STATUTE — § 790.03(h)(13)

Regulations Reach Third PartiesYES — 'claimant' is defined to include first or third party

Private Right of ActionNONE under § 790.03 — Moradi-Shalal, L.A. No. 32222 (18 Aug. 1988)

Royal GlobeS.F. No. 23843 (29 Mar. 1979) — recognized one; OVERRULED

ZhangS178542 (1 Aug. 2013) — no UCL claim predicated on § 790.03; independent grounds survive

Zhang LimitationExpressly CONFINED TO THE FIRST PARTY CONTEXT

Section 790.03 in LitigationSurvives as jury factors in a common-law bad faith case

Administrative PenaltyUp to $5,000 per act; $10,000 if willful — § 790.035

What Counts as an ActThe Commissioner has discretion to establish it

First-Party Bad FaithGruenberg, L.A. No. 30082 (11 June 1973); Egan, L.A. No. 30747 (14 Aug. 1979)

Duty to InvestigateIndependent — Egan, and cited in 10 CCR 2695.7's own authority note

Genuine Dispute DoctrineWilson, S141790 (29 Nov. 2007) — and it does NOT relieve the duty to investigate

Failure to SettleComunale, L.A. No. 24975 (22 July 1958); Crisci, S.F. No. 22433 (21 Apr. 1967)

Excess VerdictInsurer liable for the entire judgment even beyond policy limits

Brandt FeesBrandt, L.A. No. 31859 (28 Jan. 1985) — DAMAGES, not a fee award

Brandt LimitOnly fees attributable to obtaining the policy benefits; not the bad faith action itself

Time-Limited DemandsCCP §§ 999-999.5 — demands transmitted on or after 1 January 2023

Demand Acceptance WindowNOT FEWER THAN 30 DAYS from transmission

Demand ScopeAutomobile, motor vehicle, homeowner and commercial premises liability policies

Adjuster — Bad FaithNO — not a party to the contract (Gruenberg)

Adjuster — Ordinary NegligenceNO — Sanchez, B123946 (Cal. Ct. App. 19 May 1999)

Adjuster — Negligent MisrepresentationYES — Bock v. Hansen, A136567 (Cal. Ct. App. 2 Apr. 2014)

Adjuster — Fraud and IIEDPreserved by Moradi-Shalal's savings language

Punitive StandardOppression, fraud or malice by CLEAR AND CONVINCING evidence — Civ. Code § 3294

Punitive CapNONE by statute; constitutional excessiveness review applies

Corporate Punitive LiabilityOfficer, director or MANAGING AGENT — § 3294(b)

Negligence RulePURE COMPARATIVE FAULT

Proposition 51Joint and several for ECONOMIC damages; several only for NON-ECONOMIC — Civ. Code § 1431.2

Auto Minimums — through 202415/30/5

Auto Minimums — CURRENT30/60/15, for policies issued or renewed on or after 1 January 2025

Auto Minimums — 203550/100/25

Auto Minimums ActSB 1107, Stats. 2022, Ch. 717 — Veh. Code § 16056

Total Loss ThresholdNONE. Veh. Code § 544 contains no percentage of any kind

Total Loss Test'Considers it uneconomical to repair' PLUS the vehicle is not repaired, or a total loss payment was made

Salvage Certificate10 days from settlement, $15 fee — Veh. Code § 11515

Comparable AutomobileSame manufacturer, same or newer model year, same model type, similar body type, options and mileage

Valuation Method AAverage cost of two or more comparables available in the local market in the last 90 days

Valuation Method BAverage of two or more quotations from two or more licensed dealers

Taxes and One-Time FeesPaid in full

Annual FeesPRO-RATED to the remaining term of the registration

Condition DeductionOnly if the documented condition is BELOW AVERAGE

Adjustments StandardDiscernable, measurable, itemized and specified as to dollar amount

Non-OEM PartsThe insurer WARRANTS they are at least equal to original equipment parts

Diminished ValueNo California statute or regulation compels payment; controlling authority unresolved

Actual Cash ValueReplacement cost less physical depreciation — Ins. Code § 2051(b)

Depreciation LimitONLY components normally subject to repair and replacement during the useful life

Matching Rule10 CCR 2695.9(a)(2) — quality, color OR size; reasonably uniform appearance

Matching ScopeThe DAMAGED AREA — the principal limiting term

Consequential Repair DamageIncluded; the insured pays no depreciation and no cost but the deductible

Standard Fire PolicyPRESCRIBED BY STATUTE — Ins. Code § 2071

Suit Clause12 months from INCEPTION OF THE LOSS

Suit Clause in an EmergencyEXTENDED TO 24 MONTHS

Appraisal — Appraiser Notice20 days from the written request

Appraisal — Umpire15 days to agree, then a judge of a court of record selects

Appraisal — AwardAny two, in writing and itemized

Appraisal — CostsEach party pays its own appraiser; umpire and expenses shared equally

Appraisal — FormalitySTATUTORILY INFORMAL: no depositions, interrogatories, requests for admission, formal evidence rules or court reporter

Appraisal in a Declared DisasterMay be requested but SHALL NOT BE COMPELLED

Valued Policy LawNo MANDATORY law; §§ 2052-2053 create an ELECTIVE, insured-initiated mechanism at the insured's expense

Replacement Cost WindowNot less than 12 months from the first actual cash value payment

Replacement Cost in an EmergencyNOT LESS THAN 36 MONTHS — SB 495, effective 1 January 2026

Replacement Cost ExtensionsOne or more additional six-month extensions for good cause

Proof of Loss in an EmergencyMay NOT be required in less than 100 DAYS, with three-month extensions

ALE in an EmergencyNo less than 24 MONTHS, extendable to 36, then six-month increments

ALE — Civil Authority AccessAt least two weeks, extendable in two-week increments

ALE AdvanceNo less than FOUR MONTHS on request — § 2061

Contents InventoryGrouped categories must be accepted where itemizing is impractical

Contents Advance on Total Loss60 percent of the personal property limit, capped at $350,000, NO INVENTORY — § 10103.7

Contents Advance Effective1 January 2026 for the statute; 1 JULY 2026 for policy-form compliance

Combining LimitsDwelling and other structures may be combined after an emergency — § 10103.7

Premium Grace in an Emergency60 days — § 2062

Residential Disclosure10-point type, at or before application; 3 business days if by telephone — § 10102

Disclosure AcknowledgmentSigned within 60 days; no signature at renewal; redelivered every other year

Property Nonrenewal Notice75 days — § 678

Property Cancellation GroundsFive, after 60 days in effect — § 676

Wildfire MoratoriumONE YEAR from the declaration — § 675.1

Moratorium ScopeAny ZIP code WITHIN OR ADJACENT TO the fire perimeter

Moratorium Basis LimitApplies to nonrenewal based SOLELY on the wildfire location

Moratorium ZIP ListPublished by COMMISSIONER'S BULLETIN, not in the statute

Total Loss Renewal DutyAt least two annual renewal periods, no less than 24 months — § 675.1(a)

Commercial MoratoriumExtended to commercial policies by SB 547, effective 1 January 2026

Smoke Damage StandardsNONE IN FORCE. Bulletin 2025-7 is guidance

Smoke Bill PendingAB 1795, urgency clause adopted, Senate Appropriations — verify before relying

FAIR Plan BasisIns. Code § 10090 et seq.

FAIR Plan Dwelling Limit$3,000,000

FAIR Plan Commercial — Building$20,000,000

FAIR Plan Commercial — Location$100,000,000

FAIR Plan Exposure$724 billion; 668,609 policies in force as of December 2025

Guaranty Cap — General$500,000

Guaranty Cap — Dwelling Structure$1,000,000

Guaranty — Workers' CompensationEXPRESSLY CARVED OUT of the cap

Guaranty $100 FigureA FLOOR, not a deductible — under $100 not covered; $150 covered in full

Guaranty ExclusionsPunitive damages, title, credit, surety, fidelity, mortgage guaranty and more

Guaranty PositionPayer of last resort — claims covered by other insurance are excluded

Fraud Reporting Deadline60 days from the insurer's DETERMINATION — § 1872.4

Fraud Warning — Applications§ 1871.2 — applications, amendments AND claim forms

Fraud Warning — Claims§ 1879.2 — claim forms

Fraud Warning Type SizeNONE SPECIFIED — the standard is comparative prominence

Fraud ImmunityYes, for furnishing information — but it must be WITHOUT MALICE, § 1872.5

Insurer SIUContinuous operation required — § 1875.20

Comp TTD Maximum$1,764.11 per week, effective 1 January 2026

Comp TTD Minimum$264.61 per week, effective 1 January 2026

Comp State Average Weekly Wage$1,789

Comp Rate MechanismLabor Code § 4453(a)(10)

Comp Waiting Period3 days; waived if disability exceeds 14 days or there is inpatient hospitalization

Comp Notice to Employer30 days — LC § 5400

Comp Claim FormOne working day from notice or knowledge — LC § 5401

Comp LimitationsOne year — LC § 5405

Comp First Payment14 days after knowledge of injury and disability — LC § 4650

Comp Late PaymentPlus 10 percent, paid without application

Comp Accept or Deny90 DAYS from the filing of the claim form — LC § 5402(b)

Comp Presumptive Injuries75 days — LC §§ 3212 to 3212.85

Comp Consequence of Missing ItThe injury is PRESUMED COMPENSABLE

Comp Treatment Pending DecisionAuthorized within one working day, capped at $10,000

Comp Adjuster Training — CDI160 hours, 120 classroom — 10 CCR 2592.02

Comp Medical-Only Training80 hours, 50 classroom

Comp Post-Designation Training30 hours every two years; 20 for medical-only

Comp Training Completion Window12 consecutive months, extendable to 24 for specified reasons

Comp Experience ExemptionFive years within the past eight — 10 CCR 2592.01

Comp Training Is Not a LicenseAn employer-conferred designation, certified annually to the Commissioner

Comp Self-Insured Regime8 CCR 15452 — direct supervision by a person who passed the administrator's examination

Comp Bad FaithBARRED by exclusivity — Vacanti, S071945 (4 Jan. 2001)

Comp PenaltyUp to 25 percent or $10,000, WHICHEVER IS LESS — LC § 5814

Comp Self-Imposed Penalty10 percent within 90 days of discovery, in lieu

Comp Penalty LimitationsTwo years from the date payment was due

Property Suit TollingTolled from notice of damage until coverage is denied — Prudential-LMI, S011415

Inception of LossWhen appreciable damage occurs and is or should be known to the insured

Forward IndexNONE for 2025-2026 — the Table of Sections Affected is compiled after the biennium closes

Available IndexA code-scoped bill list on the Legislature's site — 146 Insurance Code bills, 31 chaptered

Legislative CalendarTwo-year biennium; 2026 passage deadline 31 August, signing deadline 30 September

Default Effective Date1 January following, unless the act carries an urgency clause

Citator NoteNo citator pass was possible; free citators are blocked to automated access

Official Links

California Department of Insurance — Licensing→CDI — Adjuster license application form LIC 041-A→CDI — Insurance Adjuster examination objectives→CDI — 2026 Guide for Adjusting Property Claims After a Major Disaster→CDI — Bulletins, Notices and Commissioner's Opinions→CDI — Workers' compensation adjuster training FAQ→CDI — Catastrophes and consumer resources→California Legislative Information — Insurance Code→California Legislative Information — bill search→California Code of Regulations (official)→Division of Workers' Compensation→DIR Office of Self-Insurance Plans — administrator examination→California FAIR Plan Association→California Insurance Guarantee Association→

Pass on the first try

Don't study generic. Study California.

You've got the roadmap. Now get the California-specific Adjuster question bank, mock exams, and video course built by instructors with 20+ years teaching this material.

See TESTivity Prep Courses → Try Free Questions First