Under California Civil Code §3287, what statutory rate of interest accrues on amounts wrongfully withheld from a claimant once the amount becomes certain?
a.10% per year, simple
b.7% per year, simple
c.5% per year, simple
d.12% per year, compounded monthly
Explanation
Cal. Civ. Code §3287, together with Article XV §1 of the California Constitution, sets the statutory interest rate at 10% per year (simple) on damages that are certain or capable of being made certain by calculation. This rate applies to delayed claim payments once the amount is established and is the figure tested on the P&C exam.
Law Reference: Cal. Civ. Code §3287; Cal. Ins. Code §10111.2This topic, taught in full in the California Property & Casualty Broker-Agent guide. California Property & Casualty Broker-Agent Study Guide — 2026 Edition — PDF + EPUB, $24.99 · 14-day refund →
Practice all 531 questions free — no signup required.
Own the complete California Property & Casualty Broker-Agent guide — PDF + EPUB, $24.99 →
Related questions on this topic
- Under Proposition 103, what must an insurer do before changing rates for auto, homeowners, or other covered property/casualty lines in California?
- Under the California Fair Claims Settlement Practices Regulations, after receiving notice of a claim, within how many calendar days must an insurer acknowledge the claim and begin any necessary investigation?
- Under California's Fair Claims Settlement Practices Regulations, within how many calendar days after receiving proof of claim must an insurer accept or deny the claim in whole or in part (absent an extension for good cause)?
- How many days written notice must a California private passenger auto insurer give before non-renewing a policy?
- A California private passenger auto policyholder wants to reject uninsured motorist (UM) coverage. The rejection is effective only if:
- Which best describes the California FAIR Plan?
Last reviewed: · editorial process
PrepPass team · Verified against California Property & Casualty Insurance License Exam · How we review