PLCaliforniamedium
A client asks a California Personal Lines Broker-Agent (PL license only) to write coverage for a 6-unit apartment building he owns and rents out. Which Cal. Ins. Code section governs whether the agent can place this risk, and what is the outcome?
AIns. Code § 1625.5 - the agent may place it because residential dwellings of any size, including large multi-unit apartment buildings, fall within personal lines scope
Ins. Code § 1625.5 - the agent may NOT place it; a 6-unit non-owner-occupied apartment exceeds the PL cap and needs a Property Broker-Agent license
CIns. Code § 1733 - the agent may place the risk so long as she first provides the required fiduciary premium-trust disclosures to the insured before binding
DVeh. Code § 16056 - the agent may place it because California treats multi-unit dwellings as auto-adjacent risks for personal lines licensing purposes
Why this is the answer
Cal. Ins. Code § 1625.5 defines the Personal Lines Broker-Agent scope as automobiles, residential dwellings of not more than four units, and other listed personal coverages. A 6-unit apartment exceeds that cap and is treated as commercial habitational property. The PL licensee must either decline the placement or refer it to a licensed Property Broker-Agent (and may receive a referral fee under § 1724 only within the statutory limits and disclosure rules). Writing the risk under a PL license is a § 1668 act-beyond-scope and may also be unauthorized transaction of insurance.
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