PSI CA Property and Casualty Practice
Examination questions and answers 2026\2027
A+ Grade
1 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
2 A claimant can be any of the following EXCEPT
- correct answer EXCEPT a person who is conducting an investigation of a claim on behalf of an insurer
3 All of the following are to be specified in an insurance policy EXCEPT
- correct answer EXCEPT the financial rating of the insured
4 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
5 What is the method used for placing business with the California Automobile Assigned Risk Program?
- correct answer The percentage of CAARP policies required is equal to the percentage of regular
insurance policies the insurer has issued within the State
6 Whether admitted or nonadmitted, how does a "foreign" insurer differ from an "alien" or "domestic"
insurer?
- correct answer A "foreign" insurer is organized under the laws of another state within the United
States
7 All of the following are reasons employers liability insurance is needed in addition to workers'
compensation insurance EXCEPT
- correct answer EXCEPT to pay medical bills
, 8 What is the purpose of the experience modification system in the California workers' compensation
experience rating system?
- correct answer It expresses a particular company's loss or claims history as a percentage to all other
companies in the industry
9 Which form of negotiation is covered under the definition of "transact" as applied to insurance?
- correct answer Negotiations preliminary to execution
10 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
11 Which circumstances in a pretext interview determine if the questions are permissible?
- correct answer When an insured is consulted by a person who hides his true identity on purpose when
fraud for a claim is suspected
12 Which is TRUE regarding expectant or contingent interest?
- correct answer Expectant or contingent interest does NOT constitute insurable interest
13 "Person" means all of the following EXCEPT
- correct answer EXCEPT an organizational trust
14 Which of the following is TRUE regarding continuing education requirements of an agent or broker?
- correct answer Any licensee shall satisfactorily complete 24 hours of instruction prior to license
renewal.
15 Except in a case where the property is being held as a carrier or depository, what is the insurable
interest is measured by?
- correct answer EXCEPT The extent to which the insured would be damnified by loss or injury to the
property
16 All of the following are included as definitions of "transact" as applied to insurance EXCEPT
- correct answer EXCEPT underwriting
Examination questions and answers 2026\2027
A+ Grade
1 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
2 A claimant can be any of the following EXCEPT
- correct answer EXCEPT a person who is conducting an investigation of a claim on behalf of an insurer
3 All of the following are to be specified in an insurance policy EXCEPT
- correct answer EXCEPT the financial rating of the insured
4 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
5 What is the method used for placing business with the California Automobile Assigned Risk Program?
- correct answer The percentage of CAARP policies required is equal to the percentage of regular
insurance policies the insurer has issued within the State
6 Whether admitted or nonadmitted, how does a "foreign" insurer differ from an "alien" or "domestic"
insurer?
- correct answer A "foreign" insurer is organized under the laws of another state within the United
States
7 All of the following are reasons employers liability insurance is needed in addition to workers'
compensation insurance EXCEPT
- correct answer EXCEPT to pay medical bills
, 8 What is the purpose of the experience modification system in the California workers' compensation
experience rating system?
- correct answer It expresses a particular company's loss or claims history as a percentage to all other
companies in the industry
9 Which form of negotiation is covered under the definition of "transact" as applied to insurance?
- correct answer Negotiations preliminary to execution
10 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
11 Which circumstances in a pretext interview determine if the questions are permissible?
- correct answer When an insured is consulted by a person who hides his true identity on purpose when
fraud for a claim is suspected
12 Which is TRUE regarding expectant or contingent interest?
- correct answer Expectant or contingent interest does NOT constitute insurable interest
13 "Person" means all of the following EXCEPT
- correct answer EXCEPT an organizational trust
14 Which of the following is TRUE regarding continuing education requirements of an agent or broker?
- correct answer Any licensee shall satisfactorily complete 24 hours of instruction prior to license
renewal.
15 Except in a case where the property is being held as a carrier or depository, what is the insurable
interest is measured by?
- correct answer EXCEPT The extent to which the insured would be damnified by loss or injury to the
property
16 All of the following are included as definitions of "transact" as applied to insurance EXCEPT
- correct answer EXCEPT underwriting
