California property and casualty
exam questions and answers
graded A UPDATED 2025
The process where by a mutul insurer becomes a stock company is called - Answer--
Demutalization
The process whereby a stock company a mutal insurer is called - Answer--Mutalization
The provision in a property policy which states that the insured has been paid up to their
insurable interest is - Answer--Valuation clause
The part of the policy that states the amout of coverage the insured property policy
period is - Answer--Declaration
Part of the policy that establishes limits upon the insurer and the insured with the
insuance policy - Answer--Conditions
Which are the characterics of negligence - Answer--Duty,breach,proximate cause,
damages
Which of the following is not a federal program - Answer--Worker' compensation
Absolute risk(liability) is imposed - Answer--When there is negligence whether proven or
not
X is in an accident with Y. X suffers $5000 of damage but it is determined that X is 60%
responsible for the accident. How much would X receive under CONTRIBUTORY
negligence rules? - Answer--$0
what is the main purpose of tort law - Answer--to determine financial responsibillty for
damage
what of the following is not considered an intentional tort? - Answer--Auto accident
,Which of the following statements is true regarding compensatory damages? - Answer--
There is usually no direct correlation between the amount of general and special
damages awarded to the victim
The insurer decides not to renewan insured's personal auto policy. How much notice
must the insurer provide to the insured - Answer--30 days
an insured's loss reserve for a claim isan estimate of the amount insurer will pay for
present and future loss, which of the following is an example of loss prevention -
Answer--a homeowner decides not to install a pool in the backyard
which of the following describes the act of making a false entry in any book statement of
report of any insurer with the intent to device any examiner lawfully appointed to
examine the insured's - Answer--an unfair practice
a person can base his/her claim for liability on the basis of all of the following EXCEPT -
Answer--breach of liability
the term "assignment"refers to - Answer--the transfer of the insured's interest in a policy
to another party
the term "subrogation" refers to - Answer--the insured's right to recover payment from a
responsible 3rd party
insur's right to recover the payment of the claim after they paid the insured for their
property losses a negligent 3rd party is know as, - Answer--subrogation
an insurance deductible is - Answer--the amount of covered expense that the insured
pays before the insurer pays,
all of the following are requirements for a notice by mail to an insured by insurer except
- Answer--notice must be sent with return receipt required
which of the following is considered special damages - Answer--Compensation for time
away from work
Which advisory organization(s) develop forms for the standard market? - Answer--
Insurane service office and American association of insurances
Which of the following would be considered special dmamges? - Answer--Lost wages
What do the initials S.tA.R.R reperesent? - Answer--Methods of risk mamagement
All of the following would be considered benfits of insurance except - Answer--Retention
of loss by the insured
,What gives an insured party the right to seek compensation if it is proven that another
person with negligence contributed to the injury - Answer--Tort law
What of the following is NOT one the three main types of insurance losses - Answer--
Financial loss
Under a special cause of loss form if a landslide is caused by an unnatural flow of water
due to improper grading, the loss is, - Answer--Excluded under the concurrent causation
An open peril policy protects agaginst the loss from - Answer--Any peril, other than
those specifically excluded
What factor supportd the principle of indemnity? - Answer--Insurable interest
All of the following are characteristics of an ideally insurable loss exposure"except" -
Answer--Losses that are catastrophic
The amount to replace property with " like property of the same quality and
construction" is the properties - Answer--Replacement value
All of the following are considered intentional torts - Answer--except, Assult
What is the difference between per accident limit in a split limit policy and single limits -
Answer--There is no difference
The intentional relinquishment of known right is - Answer--Waivier
Which type of loss is a business retirement or disability of key employee, exposed to
death retirement or disability of key employee, - Answer--Personnel loss exposure
The amount to replace an insured's damaged property - Answer--less depreciation, is
know as the, Actual cash value
The commercial property conditions included a condition called " liberalization". The
effect of this condition is - Answer--To automatically apply broader coverage to the
commercial property coverage part if a policy form revision would broaden coverage
without an addition premium
In a commercial lines program policycommon policy condition do not include which of
the following as a condition?, - Answer--Perils insured
A possibility of financially loss resulting from the ownership of property is know as -
Answer--insurable interest
, laura is driving her own car on behalf of her employer laura's negligent operation of her
car injures a member of public. The employer may be held liable because of what is
called., - Answer--Vicarious liability
A distinct feature of the alternative funding method know as self-funding is - Answer--
The benefits are tailored to the group
Actual cash value is defined as the - Answer--The amount to replace damage property
minus depreciation
Which of the following would be know as the process whereby an insurer determine
appropriate changes for its policies - Answer--Rate-making
All of the following would be considered benefits of insurance EXCEPT - Answer--
Retention of the loss by the insured
What is the formula for actual cash value (ACV) in determinig loss values - Answer--
Replacement cost less depreciation
Which of the followingwould be classified as a property insurance coverage - Answer--
Other-than-collision coverage
Which of the following is the reason that an insured should not be making any kind of
profit as the result of an insurance claim/loss being paidbut rather, the payment should
restore the insured to the financial status that existed prior to the loss with no chance of
any type of profit., - Answer--Basic principle of insurance
What is the effect of "concurrent causation" exclusion under the "cause of loss-broad
form in a commercial property policy? - Answer--If there is a loss resulting from two or
more perils that occur at the same time to cause a loss then is no coverage is any of the
perils are excluded
What will the mortgage holder do in the event that an insurer does not pay claim as the
result of the actions of the insured - Answer--Receive full payment for the loss, if the
required premium has been paid
What exactly does a policy know as "open peril" protect against - Answer--Perils not
specially named as exclusions in the policy
What does a "pure risk" consist of ? - Answer--The chance of loss only
The term "proximate clause " is best defined by which of the following? - Answer--A
negligent act that causes bodily injury or property damge that follows a sequence of
uninterrupted, but related chains of events
exam questions and answers
graded A UPDATED 2025
The process where by a mutul insurer becomes a stock company is called - Answer--
Demutalization
The process whereby a stock company a mutal insurer is called - Answer--Mutalization
The provision in a property policy which states that the insured has been paid up to their
insurable interest is - Answer--Valuation clause
The part of the policy that states the amout of coverage the insured property policy
period is - Answer--Declaration
Part of the policy that establishes limits upon the insurer and the insured with the
insuance policy - Answer--Conditions
Which are the characterics of negligence - Answer--Duty,breach,proximate cause,
damages
Which of the following is not a federal program - Answer--Worker' compensation
Absolute risk(liability) is imposed - Answer--When there is negligence whether proven or
not
X is in an accident with Y. X suffers $5000 of damage but it is determined that X is 60%
responsible for the accident. How much would X receive under CONTRIBUTORY
negligence rules? - Answer--$0
what is the main purpose of tort law - Answer--to determine financial responsibillty for
damage
what of the following is not considered an intentional tort? - Answer--Auto accident
,Which of the following statements is true regarding compensatory damages? - Answer--
There is usually no direct correlation between the amount of general and special
damages awarded to the victim
The insurer decides not to renewan insured's personal auto policy. How much notice
must the insurer provide to the insured - Answer--30 days
an insured's loss reserve for a claim isan estimate of the amount insurer will pay for
present and future loss, which of the following is an example of loss prevention -
Answer--a homeowner decides not to install a pool in the backyard
which of the following describes the act of making a false entry in any book statement of
report of any insurer with the intent to device any examiner lawfully appointed to
examine the insured's - Answer--an unfair practice
a person can base his/her claim for liability on the basis of all of the following EXCEPT -
Answer--breach of liability
the term "assignment"refers to - Answer--the transfer of the insured's interest in a policy
to another party
the term "subrogation" refers to - Answer--the insured's right to recover payment from a
responsible 3rd party
insur's right to recover the payment of the claim after they paid the insured for their
property losses a negligent 3rd party is know as, - Answer--subrogation
an insurance deductible is - Answer--the amount of covered expense that the insured
pays before the insurer pays,
all of the following are requirements for a notice by mail to an insured by insurer except
- Answer--notice must be sent with return receipt required
which of the following is considered special damages - Answer--Compensation for time
away from work
Which advisory organization(s) develop forms for the standard market? - Answer--
Insurane service office and American association of insurances
Which of the following would be considered special dmamges? - Answer--Lost wages
What do the initials S.tA.R.R reperesent? - Answer--Methods of risk mamagement
All of the following would be considered benfits of insurance except - Answer--Retention
of loss by the insured
,What gives an insured party the right to seek compensation if it is proven that another
person with negligence contributed to the injury - Answer--Tort law
What of the following is NOT one the three main types of insurance losses - Answer--
Financial loss
Under a special cause of loss form if a landslide is caused by an unnatural flow of water
due to improper grading, the loss is, - Answer--Excluded under the concurrent causation
An open peril policy protects agaginst the loss from - Answer--Any peril, other than
those specifically excluded
What factor supportd the principle of indemnity? - Answer--Insurable interest
All of the following are characteristics of an ideally insurable loss exposure"except" -
Answer--Losses that are catastrophic
The amount to replace property with " like property of the same quality and
construction" is the properties - Answer--Replacement value
All of the following are considered intentional torts - Answer--except, Assult
What is the difference between per accident limit in a split limit policy and single limits -
Answer--There is no difference
The intentional relinquishment of known right is - Answer--Waivier
Which type of loss is a business retirement or disability of key employee, exposed to
death retirement or disability of key employee, - Answer--Personnel loss exposure
The amount to replace an insured's damaged property - Answer--less depreciation, is
know as the, Actual cash value
The commercial property conditions included a condition called " liberalization". The
effect of this condition is - Answer--To automatically apply broader coverage to the
commercial property coverage part if a policy form revision would broaden coverage
without an addition premium
In a commercial lines program policycommon policy condition do not include which of
the following as a condition?, - Answer--Perils insured
A possibility of financially loss resulting from the ownership of property is know as -
Answer--insurable interest
, laura is driving her own car on behalf of her employer laura's negligent operation of her
car injures a member of public. The employer may be held liable because of what is
called., - Answer--Vicarious liability
A distinct feature of the alternative funding method know as self-funding is - Answer--
The benefits are tailored to the group
Actual cash value is defined as the - Answer--The amount to replace damage property
minus depreciation
Which of the following would be know as the process whereby an insurer determine
appropriate changes for its policies - Answer--Rate-making
All of the following would be considered benefits of insurance EXCEPT - Answer--
Retention of the loss by the insured
What is the formula for actual cash value (ACV) in determinig loss values - Answer--
Replacement cost less depreciation
Which of the followingwould be classified as a property insurance coverage - Answer--
Other-than-collision coverage
Which of the following is the reason that an insured should not be making any kind of
profit as the result of an insurance claim/loss being paidbut rather, the payment should
restore the insured to the financial status that existed prior to the loss with no chance of
any type of profit., - Answer--Basic principle of insurance
What is the effect of "concurrent causation" exclusion under the "cause of loss-broad
form in a commercial property policy? - Answer--If there is a loss resulting from two or
more perils that occur at the same time to cause a loss then is no coverage is any of the
perils are excluded
What will the mortgage holder do in the event that an insurer does not pay claim as the
result of the actions of the insured - Answer--Receive full payment for the loss, if the
required premium has been paid
What exactly does a policy know as "open peril" protect against - Answer--Perils not
specially named as exclusions in the policy
What does a "pure risk" consist of ? - Answer--The chance of loss only
The term "proximate clause " is best defined by which of the following? - Answer--A
negligent act that causes bodily injury or property damge that follows a sequence of
uninterrupted, but related chains of events
