California P&C Licensing Exam. Questions Bank. All questions with accurate answers. 100% verified. Latest Updates. Rated A

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California P&C Licensing Exam. Questions Bank. All questions with accurate answers. 100% verified. Latest Updates. Rated A Under the commercial crime coverage part, loss resulting from employee... dishonesty is: a. always excluded b. always covered c. excluded unless an employee dishonesty coverage form is attached d. always covered - ✔✔c. excluded unless an employee dishonesty coverage form is attached What is true about COBRA? a. the company can terminate health insurance at the time of termination b. once the employee is not part of the group he will need to qualify as an individual c. dependents of an employee must be given the same rights as the employee d. all of the above - ✔✔c. dependents of an employee must be given the same rights as the employee An individual who owns a duplex has damage to his rental and has loss of income. His insurance would cover this loss of rent under: a. basic, broad, and special forms b. broad and special forms only c. there is no coverage d. not covered as he isn't part of the homeowners association - ✔✔a. basic, broad, and special forms Who can sell Medicare supplement policies? a. property and casualty agents b. life analyst c. any licensed agent d. life agents only - ✔✔d. life agents only Which commercial crime coverage form provides risk coverage for money and securities? a. robbery and sage burglary coverage b. premises theft and robbery outside the premise coverage c. theft, disappearance and destruction coverage d. premises burglary coverage - ✔✔c. theft, disappearance and destruction coverage Medicare supplement policies regulated by the code must: a. market anything they want b. sell only additional coverage's c. whatever federal law allows d. offer the core benefits - ✔✔d. offer the core benefits Which of the following may not be covered under a dwelling? a. tenant improvements or additions b. detached garage c. the insured's stamp collection d. rent money that could be lost under damage to a rental property - ✔✔c. the insured's stamp collection 8. Medicare Part B requires additional premiumsa. true b. false - ✔✔a. true Which of the following perils are covered by a basic coverage form of a dwelling? a. fire and smoke b. fire, smoke and rain c. fire, lightning and internal explosion d. all of the above - ✔✔c. fire, lightning and internal explosion Which of the following is correct in regards to a Business Owner Policy for an office building? a. cannot exceed gross sales of $3 million in a year b. cannot exceed 6 stories an 60 dwelling units c. cannot exceed 6 stories or 100,000 square feet d. all of the above are correct - ✔✔c. cannot exceed 6 stories or 100,000 square feet A worker is injured and can only complete 60% of duties that his job requires; he is considered to be which: a. permanently, partially disabled b. totally disabled c. temporarily disabled d. does not qualify for disability - ✔✔a. permanently, partially disabled The Loss Sustained Form covers losses that occur during the policy period and losses are discovered and reported during the policy period or up to 1 year after the policy expires. a. true b. false - ✔✔a. true What does a Mexican liability endorsement cover? a. excess liability for accidents within 50 miles of the US border on trips of 30 days or less. b. excess liability for accidents within 25 miles of the US border on trips of 10 days or less. c. excess liability for accidents within 100 miles of the US border on trips of 10 days or less d. None of the above - ✔✔b. excess liability for accidents within 25 miles of the US border on trips of 10 days or less. Which of the following has the most stringent definition of a total disability? a. Partial disability b. Temporary disability c. total disability under the social security disability d. all of the definitions are universal - ✔✔c. total disability under the social security disability Which of the following dwelling forms does not include burglary of the insured's personal property? a. Basic b. Broad c. Special d. named perils - ✔✔a. Basic Which of the following homeowners forms has the broadest coverage? a. Basic b. Broad c. Named Peril d. Special - ✔✔d. Special Why does boiler and machinery coverage need to be added to a commercial package? a. Boiler and machinery is too dangerous for regular commercial lines b. Boiler and machinery is too expensive for regular insurance companies c. a separate coverage is needed due to the fact that most lines of insurance exclude boiler and machinery d. all of the above. - ✔✔c. a separate coverage is needed due to the fact that most lines of insurance exclude boiler and machinery In order to sell long term care, a licensed agent must do how many hours pertaining solely to long term care? a. 6 hours b. 4 hours c. 8 hours d. 24 hours - ✔✔c. 8 hours Majority of the premium for a boiler and machinery policy is used for: a. inspection b. clean up c. Underwriting d. Company expenses - ✔✔a. inspection Theft of inventory and shortage of inventory would be covered by Employee Dishonestya. true b. false - ✔✔b. false Which of the following has the broadest definition? a. theft b. larceny c. burglary d. steeling - ✔✔a. theft Employee dishonesty does not cover: a. theft from a safe b. burglary of the store c. shortages of inventory d. theft out of the register - ✔✔c. shortages of inventory An insurer can do an audit of the insured's records during a policy and for how long? a. 5 years b. 2 years c. 3 years d. depends upon insurance retroactive date - ✔✔c. 3 years A commercial policy can only be amended and waived: a. with consent and endorsement from the insurer b. only by the insurer and attached to the policy c. only before insurance is in effect d. all of the above - ✔✔a. with consent and endorsement from the insurer Commercial packages must contain: a. conditions b. declarations c. two or more coverage forms (modules) d. all of the above - ✔✔d. all of the above Why purchase a commercial package policy vs. several monoline policies? a. ease of coverage under one policy b. reduces ambiguous language c. reduces gaps in coverage d. all of the above. - ✔✔d. all of the above What is a monoline policy? a. Not found in the ordinary insurance market only through surplus lines b. any insurance that is a single line (single module) c. only contains business property coverage d. all of the above. - ✔✔b. any insurance that is a single line (single module) The general aggregate limit: a. does not apply to the products and completed operation aggregate limit b. most an insured will have to pay during a policy period c. it applies to the whole amount an insurer will pay during a policy period d. none of the above. - ✔✔a. does not apply to the products and completed operation aggregate limit Who can write insurance through the FAIR plan? a. Property/casualty agents b. solicitors c. life and health agents d. any insurance agent - ✔✔a. property/casualty agents Who can purchase insurance through the fair plan? a. insured's who fall in the areas that are not reasonable risks or too expensive to insure profitably b. anyone that can't obtain insurance for non-payment c. young drivers with little to no driving history d. all of the above - ✔✔a. insured's who fall in the areas that are not reasonable risks or too expensive to insure profitably A house that falls in a designated brush fire area could not obtain insurance through the fair plan.a. true b. false - ✔✔b. false Which of the following are coverage's provided by inland marine? a. domestic shipments b. personal property risks c. transportation and communications equipment d. all of the above - ✔✔c. transportation and communications equipment What type of coverage does inland marine provide? a. basic b. broad c. open peril d. named peril - ✔✔c. open peril An automobile kept for a customer in a parking structure would be covered by what coverage: a. inland marine b. garage keepers c. business personal property d. commercial auto insurance - ✔✔b. garage keepers A provision in liability insurance that created the implementation of inland marine insurance is: a. care custody and control exclusion b. open peril c. special form d. coinsurance clause - ✔✔a. care custody and control exclusion 36. An employee working in a customer's home trips and injures the customer causing property damage. The employee and business would be covered under: a. inland marine b. commercial property insurance c. commercial general liability d. personal liability policy - ✔✔c. commercial general liability Liquor liability form is only for companies/businesses that's sole business is serving and selling liquora. true b. false - ✔✔a. true A customer falls and trips on the insured's business property what would cover this? a. workers comp b. commercial general liability c. products completed operations d. none of the above - ✔✔b. commercial general liability The main purpose of insurance is to: a. transfer the risk from one person to an insurance company b. retain the risk c. reduce risk exposure d. none of the above - ✔✔a. transfer the risk from one person to an insurance company All of the following must be present to be an insurable risk excepta. loss must cause financial hardship b. cost must be affordable c. loss must be calculable d. speculative risk - ✔✔d. speculative risk How do we calculate actual cash value in a homea. stated value b. replacement cost minus depreciation c. replacement cost d. selling price - ✔✔b. replacement cost minus depreciation When a policy is cancelled and the insurer only retains the earned premium, this is said to be: a. short rate b. flat cancellation c. pro rata d. none of the above - ✔✔c. pro rata An insured purchased furniture for $8,000. There was a fire destroying the furniture that had depreciated $3,000 in value. The replacement cost of the furniture is $9,000. The actual cash value is valued at: a. $4,000 b. $3,000 c. $6,000 d. $5,500 - ✔✔c. $6,000 What does aggregate limit apply? a. Total amount an insurance company will pay per occurrence b. Total amount an insurer will pay out during a policy period c. Total amount of insurance an insured can purchase d. Total amount an insurer can distribute in policies - ✔✔b. Total amount an insurer will pay out during a policy period Coinsurance is: a. coverage for all policies that an insured carries b. a requirement of the amount of insurance that an insured needs to carry in order to be fully insured c. a monoline policy coverage form d. applies per occurrence - ✔✔b. a requirement of the amount of insurance that an insured needs to carry in order to be fully insured Rates must be filed and approved before issued, this is known as: a. the pre-approval method b. file and use c. monopolistic d. short rate - ✔✔a. the pre-approval method The insured and the insurer can both cancel a policy as long as it doesn't break any lawsa. true b. false - ✔✔a. true What effect does increasing a deductible have on the premium: a. increases the premium b. decrease the premium c. increases the chance of obtaining insurance d. decreases the chance of obtaining insurance - ✔✔b. decrease the premium Compensation for losses returning an insured to a financial position that is as if the loss never occurred: a. indemnity b. absolute liability c. second party losses d. underwriting - ✔✔a. indemnity A house located next to a plant that makes bombs is what kind of hazard? a. moral b. legal c. personnel d. physical - ✔✔d. physical If a covered loss occurs and the insured does not handle the loss appropriately, the mortgage holder will not receive compensation: a. true b. false - ✔✔b. false Under a dwelling policy personal property away from the premises is covered under what percent: a. 10 b. 20 c. 15 d. none - ✔✔a. 10 The coverage form that provides protection for all perils except those specifically excluded is known as: a. all risk b. named peril c. broad coverage d. basic coverage - ✔✔a. all risk Risk can be defined as: a. chance of loss b. chance of gain or loss c. certainty of loss d. proximate cause - ✔✔a. chance of loss The number 7 as it appears in a commercial auto policy refers to: a. specific autos b. non owned c. owned d. none of the above - ✔✔a. specific autos The number 9 as it appears in a commercial auto policy refers to: a. specific autos b. non-owned c. owned d. livery conveyance - ✔✔b. non-owned Liability of the employer arising out of an employee's actions is: a. vicarious liability b. broad liability c. gross negligence d. assumed liability - ✔✔a. vicarious liability A binder provides temporary coverage and can be written for what amount: a. $20,000 b. $100,000 c. $250,000 d. $1,000,000 - ✔✔d. $1,000,000 All of the following are not true of an insurable risk except: a. loss must be catastrophic in nature b. risk must be uncertain c. loss must not be definite and definable d. there must be the possibility of loss or gain - ✔✔b. risk must be uncertain If the claims made form is attached to a commercial policy, the first date that event may occur and be covered is the: a. retroactive date b. discovery date c. inception date d. residual date - ✔✔a. retroactive date The homeowners from that covers the dwelling all risk and the personal property as broad coverage is: a. HO4 b. HO6 c. HO5 d. HO3 - ✔✔d. HO5 Medical payments and liability fall under section 2 of the homeowners forma. true b. false - ✔✔a. true Which of the following does a Homeowners policy provide that a dwelling policy does nota. other structures b. personal property c. dwelling d. liability - ✔✔d. liability Scheduled personal property would includea. autos and trailers b. the building and other structures c. jewelry, furs, and other structures d. all of the above - ✔✔c. jewelry, furs, and other structures What coverage is the same on an HO3 and an HO8a. liability and medical payments b. dwelling and other structures c. loss of use d. theft coverage - ✔✔a. liability and medical payments Which of the following homeowners forms will cover a condoa. HO4 b. HO3 c. HO8 d. HO6 - ✔✔d. HO6 Which of the following homeowners forms will cover a rental propertya. HO3 b. HO5 c. HO8 d. HO4 - ✔✔d. HO4 An HO4 provides coverage for? a. the building b. the other structures c. tenants personal property d. all of the above - ✔✔c. tenants personal property What Homeowners form provides all risk coverage on personal and real property? a. HO5 b. HO3 c. HO6 d. HO8 - ✔✔a. HO5 An HO1 is most similar to a: a. HO4 b. JO6 c. HO8 d. HO1 - ✔✔c. HO8 Personal property away from the premises under a homeowners policy is covered up to: a. 50% b. 25% c. 10% d. full limit of personal property - ✔✔d. full limit of personal property All insurance companies selling homeowners insurance must offer earthquake insurancea. true b. false - ✔✔a. true An HO3 provides coverage for: a. damage from an earthquake b. damage to furniture while being removed during a fire c. damage to personal property cause by flood d. all of the above - ✔✔b. damage to furniture while being removed during a fire Which of the following would be covered by an HO3? a. an office building b. an apartment building c. single family, owner occupied d. single family, renter occupied - ✔✔c. single family, owner occupied If a homeowner wants coverage for such things as libel and slander, what should the agent tell his client? a. It is included in the liability section of a homeowners policy b. Have the client add a personal injury endorsement to the contract c. This cannot be covered under a homeowners policy. The client will need a commercial general liability policy. - ✔✔b. Have the client add a personal injury endorsement to the contract Under a homeowners policy the dwelling is valued at $100,000 and the garage at $20,000. In order to maintain the proper amount offer coinsurance, the insured needs to carry what amount of insurance? a. dwelling $100,000; garage $16,000 b. dwelling $100,000; garage $8,000 c. dwelling $80,000; garage $16,000 d. dwelling $80,000; garage $8,000 - ✔✔c. dwelling $80,000; garage $16,000 Why would an insured purchase a homeowners policy instead of a dwelling company? a. he does not need liability b. he owns six units and occupies one of the units c. he wants broader coverage - ✔✔c. he wants broader coverage What do the numbers 15/30/5 mean in an auto policy? a. bodily injury per person/property damage per occurrence/medical payments per person b. bodily injury per person/bodily injury per occurrence/property damage per occurrence c. property damage per person/property damage per occurrence/medical payments per person d. none of the above - ✔✔b. bodily injury per person/bodily injury per occurrence/property damage per occurrence Which of the following would be covered under the "other than collision" coveragea. contact with an animal b. vandalism c. falling object d. all of the above - ✔✔d. all of the above Damage as it applies to a personal auto policy will exclude which of the following? a. mechanical breakdown b. fire c. hail d. all of the above - ✔✔a. mechanical breakdown Make and model of the car do not have a factor in determining the premium for liability in an auto policya. true b. false - ✔✔a. true Which of the following constitutes cancellation of an auto policy on behalf of the insurer? a. the inured turns 76 (age) b. failure to notify the insurer of an accident in a timely fashion c. suspension of the insured license or someone who regularly drives the car d. the insurer cannot cancel a policy - ✔✔c. suspension of the insured license or someone who regularly drives the car Choose the best definition of collision: a. two cars collide on the highway b. a car collides with any form of nature (i.e. dear, birds) c. a car collides with an object or the upset of a car d. a car collides with any object that is moving - ✔✔c. a car collides with an object or the upset of a car In a personal auto policy supplemental payments include all of the following except: a. cost of defense in excess of liability coverage b. up to 250 for the cost of bail c. costs incurred due to attending a court hearing at the request of the insurer d. increase in premium due to financial hardship - ✔✔d. increase in premium due to financial hardship A personal auto policy would cover negligence of the insured which inherently causes property damage to othersa. true b. false - ✔✔a. true A personal auto insured wants coverage for his motorcycle, why is an endorsement needed? a. the insured does not have a motorcycle license b. no endorsement exists that can cover a motorcycle under a personal auto policy c. the personal auto policy does not cover a motorcycle under a personal auto policy d. none of the above - ✔✔c. the personal auto policy does not cover a motorcycle under a personal auto policy If an insured borrows a car and gets in an accident. The owner of the automobile also has insurance, what is true? a. both policies apply equally splitting costs b. the insured's policy pays for the damage only c. both policies apply, the owner of the automobile's insurance is primary and the borrowers is secondary d. the owners insurance pays the claims - ✔✔c. both policies apply, the owner of the automobile's insurance is primary and the borrowers is secondary Damage caused by an earthquake to an automobile is covered only if the car has: a. other than collision b. supplementary payments c. collision d. none of the above will cover earthquake - ✔✔a. other than collision At what age do individuals qualify for social security benefitsa. 65 b. 60 c. depends upon date of birth d. 70 - ✔✔c. depends upon date of birth Medicare Part B requires a premium payment. After this the insured also is responsible for what percent of the bills? a. 10% b. 15% c. 30% d. 20% - ✔✔d. 20% What is not a good reason for the purchase of a long term care policya. intelligibility for a Medicare supplement policy b. Deafness runs in your family c. Did not qualify for medical d. Medicare refused to cover a claim - ✔✔a. intelligibility for a Medicare supplement policy Who is affected by a blackout perioda. surviving spouse b. the surviving children c. the surviving parents - ✔✔a. surviving spouse At what age does the blackout period enda. 65 b. 60 c. 55 d. 70 - ✔✔b. 60 Under the Mexico endorsement on a personal auto policy how long does the insured have coveragea. 5 days b. 10 days c. 15 days d. 7 days - ✔✔b. 10 days Long-term care is least needed by the very rich and the very poora. true b. false - ✔✔a. true Low cost auto insurance requires the insured to carry what limitsa. 5/30/15 b. 10/20/3 c. 15/30/5 d. 100/300/100 - ✔✔b. 10/20/3 How is a HO3 similar to an HO5a. both provide open peril coverage on the dwelling b. both provide open peril coverage on personal property c. both provide broad coverage on the dwelling d. all of the above - ✔✔a. both provide open peril coverage on the dwelling In insurance terms, what term is mandatorya. May b. Shall c. Waiver d. Thus - ✔✔b. Shall If fraud is committed by either party f a contract, what is the option of the injured party? a. sue for slander b. rescind the contract c. cancel the contract pro rata d. all of the above - ✔✔b. rescind the contract The commissioner of insurance is an elected official he can serve up to how many yearsa. 6 years b. 4 years c. 8 years d. 10 years - ✔✔c. 8 years Under an H-O policy, which of the following would be covered under Coverage B? a. a garage that is attached to the house b. a deck on the back of the house c. swimming pool d. none of the above - ✔✔c. swimming pool The effort to decrease the dollar aount of a loss would bea. reduction b. loss retention c. pure risk d. loss prevention - ✔✔d. loss prevention Anyone can buy flood insurance through the NIFP (National Insurance Flood Program)a. true b. false - ✔✔b. false Legal liability case would apply to all of the following except a. general b. proximate c. special d. punitive - ✔✔b. proximate Under the CA code of regulation, governing claim settlement practices prohibits all the following for unfair discrimination, excepta. denied the claim based on gender b. denied the claim based on annual income c. denied the claim based on race d. denied the claim based on reckless behavior - ✔✔d. denied the claim based on reckless behavior Homeowners policies provide additional coverage, which of the following is not one of additional coverage'sa. reasonable repairs b. fire department charges c. plants, shrubs, and trees d. additional living expenses - ✔✔d. additional living expenses Under a Homeowners policy when would mudslides be covereda. Only if its caused by an earthquake b. volcanic eruption c. when you file the claim within 30 days d. Never - ✔✔d. Never When can an insurer refer a body shop to the insureda. only when a special accident occurs b. never c. when the shop is listed to be used d. none of the above - ✔✔c. when the shop is listed to be used Can animals be covered under a homeowners policy? a. yes b. no - ✔✔b. no The purpose of the California fair plan would apply to all the following excepta. To give the availability of basic property insurance in California b. To encourage competition among insurers who write business in CA c. To encourage maximum use of the normal insurance market provided by admitting insurers d. All of the above - ✔✔b. To encourage competition among insurers who write business in CA Under Ocean Marine all the following are claims that are covered by P&I Excepta. Injury to an employee of the ship b. Injury to a passenger c. Damage to the ship and fuel d. All of the above - ✔✔c. Damage to the ship and fuel The purpose of the California fair plan apply to all the following excepta. To help stability in the California insurance market b. To encourage maximum use of the normal insurance market provided by admitted insures c. To provide insurance to people who live in a brush fire area d. encourage insurance companies to compete - ✔✔d. encourage insurance companies to compete Under a homeowners policy Subsidence isa. always covered b. excluded under earthquake exclusion c. there's no such thing d. covered because its not listed on the exclusion - ✔✔b. excluded under earthquake exclusion Business income form, the extended business income coverage pertains toa. coverage applies to continue after the premises are restored b. this coverage only applies to new buildings c. this coverage only applies to new locations d. none of the above - ✔✔a. coverage applies to continue after the premises are restored Ed ran a red light and damages a claimants BMW. What type of coverage would he need to cover the BMWa. Physical damage b. Homeowners insurance c. Auto liability insurance d. CGL - ✔✔c. Auto liability insurance All the following are not covered under CGL except a. employee fighting with another employee b. employee being injured while working c. employee injuring a customer d. employee gets in a car accident that is owned by the owner of the business - ✔✔c. employee injuring a customer The purpose of CAARP is toa. protect the insured b. make auto insurance available to residents of the state c. make auto insurance available to everyone in the US d. Give homeowners to buy insurance when denied in a voluntary market - ✔✔b. make auto insurance available to residents of the state A primary reason for an umbrella policy is? a. to provide excess coverage for first party losses b. to provide investment capital c. provide gap coverage for first party losses d. none of the above - ✔✔a. to provide excess coverage for first party losses When must insurable interest exist in property insurance? a. only at the time of application b. only at the time of loss c. when the policy takes an effect and at the time of loss d. all of the above - ✔✔c. when the policy takes an effect and at the time of loss Workers compensation provides which of the followinga. provides retirement income b. provides compensation for work related accidents regardless at fault c. provides major medical with a co-insurance of 80/20 - ✔✔b. provides compensation for work related accidents regardless at fault Who has the authority to investigate an agent for unfair trade/claim practices? a. the district attorney b. the commissioner of insurance c. the police of the city you conduct business d. the insurance services office (ISO) - ✔✔b. the commissioner of insurance Which CA program would provide protection for property owner for basic coverage if the owner wasn't able to obtain coverage in the ordinary insurance marketa. TSA plan b. dwelling program c. fair plan d. all of the above - ✔✔c. fair plan [Show More]

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