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California Property and Casualty Insurance Exam Question & Answers 2025
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What is the required rate discount under a Good Driver Discount policy?
All the following are requirements for determining an area that qualifies for Low Cost Automobile Insurance EXCEPT - CORRECT ANSWER ✔✔The number of auto accidents that occur within the country Which of the following describes a contract of reinsurance? - CORRECT ANSWER ✔✔The first insurer issues insurance to compensate another insurer for losses on contracts issued by that second insurer The managing General Agent negotiates and binds ceding Insurance on behalf of whom? - CORRECT ANSWER ✔✔The insurer All of the following are duties of a Managing General Agent EXCEPT - CORRECT ANSWER ✔✔Delivering policies to the insured Who is able to place business through the California Automobile Assessed Risk Program? - CORRECT ANSWER ✔✔Only agent/brokers licensed in fire and Casualty who have also been certified through CAARP Can a lender, as a condition of making a loan, require that any insurance be placed through a particular insurance agent or broker? - CORRECT ANSWER ✔✔The loan recipient may always select a particular agent or broker of their choosing
A personal lines licensed is an agent-broker who is able to transact coverage for all of the following EXCEPT - CORRECT ANSWER ✔✔Personal aircraft What is the maximum coverage allowed through the California Automobile Assigned Risk Program for bodily injury and death? - CORRECT ANSWER ✔✔The max coverage per accident is limited to $30,000 of all persons as a result of any one accident What is the method used for placing business with the California Automobile Assigned Risk Program? - CORRECT ANSWER ✔✔The percentage of CAARP policies requires is equal to the percentage of regular insurance policies the insurer has issued within the state How many days prior to policy expiration is an insurer requires to mail a non renewal notice to the named insured? - CORRECT ANSWER ✔✔30 days All of the following are permissible reasons for a consumer reporting agency to furnish motor vehicle, past claims, or credit reports EXCEPT - CORRECT ANSWER ✔✔A request of a national news organization for an investigative story
What must an individual do in order to act as an agent for a business entity or insurer offering limited lines automobile coverage? - CORRECT ANSWER ✔✔File a notice of appointment with the commissioner What possible consequences are faced from the insurance commissioner by an agent or broker who does not within 60 days comply with an order to establish and complete records? - CORRECT ANSWER ✔✔A suspension or revocation of license To which person or organization does a public insurance adjuster promote and represent? - CORRECT ANSWER ✔✔The insured Under the California Vehicle Code all of the following are acceptable to satisfy the Financial Responsibility requirement EXCEPt - CORRECT ANSWER ✔✔A company with an escrow account that is licensed to do business in California All the following are taken into consideration for California Automobile Assigned Risk Program eligibility for applicants EXCEPT - CORRECT ANSWER ✔✔The education of the applicant
separate policy to cover the earthquake is required, an endorsement is insufficient What document must be provided to the insured prior to any residential insurance policy being issued or renewed? - CORRECT ANSWER ✔✔A copy of the California residential property disclosure statement Which type of coverage protects against loss caused by earth movement? - CORRECT ANSWER ✔✔A stand-alone earthquake insurance policy specifically insuring against loss caused by land subsidence Who is responsible for notifying the public of a proposed rate increase - CORRECT ANSWER ✔✔The insurance commissioner Which is TRUE regarding expectant or contingent interest? - CORRECT ANSWER ✔✔Expectant or contingent interest does NOT constitute insurance interest Which of the following is TRUE regarding continuing education requirements of an agent or broker? - CORRECT ANSWER ✔✔Any
licensee shall satisfactorily complete 24 hrs of instruction prior to license renewal "Notice is legal action" can mean all of the following EXCEPT - CORRECT ANSWER ✔✔Notice of action against the agent Which of the following provisions of free insurance offered as an incentive to purchase or rent property is TRUE - CORRECT ANSWER ✔✔It requires a separate charge or fee Which is an INACCURATE statement of the purpose and intent of the insurance information and privacy act? - CORRECT ANSWER ✔✔The act permits disclosure of insurance underwriting Information and claim history records How can a licensee surrender any license for cancellation? - CORRECT ANSWER ✔✔By submitting written notice or by delivering the license to the commissioner Which of the following is an insurer allowed to do in the event of a claim? - CORRECT ANSWER ✔✔Request a medical exam for the purpose of determining liability under a policy provision
All of the following are examples of misrepresentation that may not be made by an insurer, officer or agent thereof or an insurance broker or solicitor EXCEPT - CORRECT ANSWER ✔✔The specific contract language How may a license be surrendered by the insuree, or terminate by the employer? - CORRECT ANSWER ✔✔Personally delivering the license to the insurance commissioner, or by written notice from the employer Which circumstances in a pretext interview determine if the questions are permissible? - CORRECT ANSWER ✔✔When the insured is consulted by a person who hides his true identity on purpose when fraud for a claim is suspected Which of the following is TRUE regarding nonadmitted insurers - CORRECT ANSWER ✔✔Acting as an agent for a nonadmitted insurer is considered a misdemeanor Which group is offered additional protection by the Unfair Practices Act that regulates trade practices in the business of insurance? - CORRECT ANSWER ✔✔Survivors of the holocaust
What is the maximum fine for a person who transacts insurance without a valid license? - CORRECT ANSWER ✔✔$50,000 and/or imprisonment for a period not exceeding one year All of the following are to be specified in an insurance policy EXCEPT - CORRECT ANSWER ✔✔The financial rating of the insured It is unlawful to do any of the following EXCEPT - CORRECT ANSWER ✔✔Make or caused to made a knowingly false or fraudulent or material representation for the purpose of encouraging an injured worker to claim benefits Which is considered no public personal information as defined by the California Financial Code? - CORRECT ANSWER ✔✔Tax return Which form of negotiation is covered h see the definition of "transact" as applied to insurance? - CORRECT ANSWER ✔✔Negotiations preliminary to execution Which of the following may be insured against? - CORRECT ANSWER ✔✔Wagering losses
ANSWER ✔✔The fees and process are the same as for a personal lines licensee All of the following are reasons employers liability insurance is needed in addition to workers compensation insurance EXCEPT - CORRECT ANSWER ✔✔To pay medical bills What is the primary function of the CAARP? - CORRECT ANSWER ✔✔To put people who have trouble obtaining insurance in touch with insurers who may be required by law to insure them In order for an insurer to contract with the State Compensation Insurance Fund it must meet all of the following criteria EXCEPT - CORRECT ANSWER ✔✔The insurer has met all ratio requirements for risk based capital (RBC) Which of the following is TRUE regarding who qualifies for coverage under the California Fair Access to Insurance Requirements plan? - CORRECT ANSWER ✔✔Any person who is unable to obtain basic property insurance through normal channels
All of the following are TRUE regarding basic property insurance EXCEPT