PROPERTY, CASUALTY, AND ETHICS
EXAM PREP QUESTIONS AND
ANSWERS WITH VERIFIED SOLUTIONS
100% CORRECT RATED A+ NEWLY
UPDATED 2025
Examples of an Adverse Underwriting Decision
✔✔ Rejecting the risk, charging a higher rate, and issuing with limitations
Types of Torts
✔✔ Intentional and unintentional
A Waiver
✔✔ When an insured rejects uninsured motorist coverage in writing, this is
considered a waiver
Contract
✔✔ A binding agreement between two or more persons that is enforceable by law
Tort Law Includes:
✔✔ Libel and slander, bodily injury, and personal injury
Risk
✔✔ The chance of loss from an event that cannot be entirely controlled
,Adverse Selection
✔✔ A high-risk person benefits more from insurance and is therefore more likely
to purchase it
Speculative and Pure
✔✔ The two types of risk
Bond Insurance Companies
✔✔ NOT a known private insurer
Casualty
✔✔ NOT a class of insurance
(Note: This is misleading — Casualty is actually considered one of the classes of
insurance under California law.)
Estoppel
✔✔ The process which prevents claim denial as a result of a false statement or
promise made by the insurer that was relied upon by the insured
The more insurable it becomes - ANSWER✔✔The more unpredictable a loss
becomes...
Punishment for twisting or misrepresentation would be: - ANSWER✔✔Up to
$25,000 AND Up to 1 year in jail
Loss exposure is - ANSWER✔✔The possibility of Loss
, Liability loss exposure - ANSWER✔✔The degree of loss a person/organization
faces in regard to lawsuits brought by a third party.
exposure - ANSWER✔✔The state of being subject to a loss is considered...
Peril is... - ANSWER✔✔The actual cause of loss
Loss Control - ANSWER✔✔taking measures to prevent some losses from
occurring or to reduce the financial consequences of losses that do occur
Property Loss Exposure - ANSWER✔✔A type of loss pertaining to land and
structures attached to it
According to the California Insurance law, either party may rescind a contract for
any of the following reasons EXCEPT: - ANSWER✔✔Once a contract is signed,
it can never be rescinded
It may be rescind if: One party intentionally omits information from the other
party.
One party intentionally or unintentionally hides information from the other party
Deductible - ANSWER✔✔Amount you must pay before you begin receiving any
benefits from your insurance company
Underwriting - ANSWER✔✔the process of selecting, classifying, and pricing
applicants for insurance
EXAM PREP QUESTIONS AND
ANSWERS WITH VERIFIED SOLUTIONS
100% CORRECT RATED A+ NEWLY
UPDATED 2025
Examples of an Adverse Underwriting Decision
✔✔ Rejecting the risk, charging a higher rate, and issuing with limitations
Types of Torts
✔✔ Intentional and unintentional
A Waiver
✔✔ When an insured rejects uninsured motorist coverage in writing, this is
considered a waiver
Contract
✔✔ A binding agreement between two or more persons that is enforceable by law
Tort Law Includes:
✔✔ Libel and slander, bodily injury, and personal injury
Risk
✔✔ The chance of loss from an event that cannot be entirely controlled
,Adverse Selection
✔✔ A high-risk person benefits more from insurance and is therefore more likely
to purchase it
Speculative and Pure
✔✔ The two types of risk
Bond Insurance Companies
✔✔ NOT a known private insurer
Casualty
✔✔ NOT a class of insurance
(Note: This is misleading — Casualty is actually considered one of the classes of
insurance under California law.)
Estoppel
✔✔ The process which prevents claim denial as a result of a false statement or
promise made by the insurer that was relied upon by the insured
The more insurable it becomes - ANSWER✔✔The more unpredictable a loss
becomes...
Punishment for twisting or misrepresentation would be: - ANSWER✔✔Up to
$25,000 AND Up to 1 year in jail
Loss exposure is - ANSWER✔✔The possibility of Loss
, Liability loss exposure - ANSWER✔✔The degree of loss a person/organization
faces in regard to lawsuits brought by a third party.
exposure - ANSWER✔✔The state of being subject to a loss is considered...
Peril is... - ANSWER✔✔The actual cause of loss
Loss Control - ANSWER✔✔taking measures to prevent some losses from
occurring or to reduce the financial consequences of losses that do occur
Property Loss Exposure - ANSWER✔✔A type of loss pertaining to land and
structures attached to it
According to the California Insurance law, either party may rescind a contract for
any of the following reasons EXCEPT: - ANSWER✔✔Once a contract is signed,
it can never be rescinded
It may be rescind if: One party intentionally omits information from the other
party.
One party intentionally or unintentionally hides information from the other party
Deductible - ANSWER✔✔Amount you must pay before you begin receiving any
benefits from your insurance company
Underwriting - ANSWER✔✔the process of selecting, classifying, and pricing
applicants for insurance
