CALIFORNIA PROPERTY AND CASUALTY
INSURANCE COMPREHENSIVE LICENSING
TEST 2026 COMPLETE QUESTIONS AND
ANSWERS
◉ On HOMEOWNERS POLICIES, personal property used for business
purposes is:
Covered up to $2,500 on the premises and up to $500 off the
premises.
Answer: HOMEOWNERS POLICIES do cover some property used for
business, by the coverage is subject to special limitations. The policy
will only provide up to $2,500 of coverage for business property on
the residence premises and $500 of coverage for business property
away from the premises.
◉ When an insured cancels a policy prior to its expiration date, the
insurance company will return a portion of the unused premium on
a short rate basis, What does the term "short Rate" mean?
The insurer will keep the earned premium plus an additional
amount for policy writing expenses.
,Answer: when an insured cancels a policy prior to expiration, the
unearned premium may be returned on a short rate basis. This
means that the company not only keeps the earned premium for the
insurance provided, but also keeps an additional amount for
expenses of issuing the policy.
◉ he taking of money or other property from inside a premises by
someone who has unlawfully and forcefully entered or exited is an
example of what kind of crime?
Burglary.
Answer: Burglary is the taking of money or other property from
inside a premises by someone who has unlawfully entered or exited
the premises. There must be visible evidence or forced entry or exit.
Robbery is taking money or property by force or threat.
Embezzlement is taking money by means of bookkeeping fraud. Sage
burglary is a special from of burglary that specifically refers only to
breaking into a safe to take money or property, as opposed to just
breaking in to a premises.
◉ Which method of risk management best describes the use of high
deductibles or elements of self insurance to reduce insurance costs?
Retention.
, Answer: Risks may be retained in whole or in part by intentionally
self insuring or selecting high deductibles. The other risk
management options are not examples of risk reduction. Transfer
refers to the purchase of insurance , where the risk of loss is
assumed by the insurance company in return for the premium.
Avoidance means taking steps to not incur the risk at all, such as
never driving a car to avoid the risk of collision. Reduction means
taking steps to lower the severity of a loss if it occurs, such as
installing a sprinkler system- a fire might still occur, but it won't
spread if the sprinkler system puts the fire out.
◉ Office buildings are eligible for coverage under a BUSINESS
OWNERS POLICY if the do not contain more than 100,000 square
feet of space and do not exceed:
6 Stories in height.
Answer: Under the eligibility rules, office buildings may qualify for
coverage under a BUSINESS OWNERS POLICY if they do not exceed
100,000 SQ Feet of space and do not exceed 6 stories in height.
◉ An insurance company has made an underwriting profit when...
Its combined ratio is less than 100%
Answer: The combined ration is the sum of the loss ration and the
expense ration. A combined ratio of less than 100% indicates that
INSURANCE COMPREHENSIVE LICENSING
TEST 2026 COMPLETE QUESTIONS AND
ANSWERS
◉ On HOMEOWNERS POLICIES, personal property used for business
purposes is:
Covered up to $2,500 on the premises and up to $500 off the
premises.
Answer: HOMEOWNERS POLICIES do cover some property used for
business, by the coverage is subject to special limitations. The policy
will only provide up to $2,500 of coverage for business property on
the residence premises and $500 of coverage for business property
away from the premises.
◉ When an insured cancels a policy prior to its expiration date, the
insurance company will return a portion of the unused premium on
a short rate basis, What does the term "short Rate" mean?
The insurer will keep the earned premium plus an additional
amount for policy writing expenses.
,Answer: when an insured cancels a policy prior to expiration, the
unearned premium may be returned on a short rate basis. This
means that the company not only keeps the earned premium for the
insurance provided, but also keeps an additional amount for
expenses of issuing the policy.
◉ he taking of money or other property from inside a premises by
someone who has unlawfully and forcefully entered or exited is an
example of what kind of crime?
Burglary.
Answer: Burglary is the taking of money or other property from
inside a premises by someone who has unlawfully entered or exited
the premises. There must be visible evidence or forced entry or exit.
Robbery is taking money or property by force or threat.
Embezzlement is taking money by means of bookkeeping fraud. Sage
burglary is a special from of burglary that specifically refers only to
breaking into a safe to take money or property, as opposed to just
breaking in to a premises.
◉ Which method of risk management best describes the use of high
deductibles or elements of self insurance to reduce insurance costs?
Retention.
, Answer: Risks may be retained in whole or in part by intentionally
self insuring or selecting high deductibles. The other risk
management options are not examples of risk reduction. Transfer
refers to the purchase of insurance , where the risk of loss is
assumed by the insurance company in return for the premium.
Avoidance means taking steps to not incur the risk at all, such as
never driving a car to avoid the risk of collision. Reduction means
taking steps to lower the severity of a loss if it occurs, such as
installing a sprinkler system- a fire might still occur, but it won't
spread if the sprinkler system puts the fire out.
◉ Office buildings are eligible for coverage under a BUSINESS
OWNERS POLICY if the do not contain more than 100,000 square
feet of space and do not exceed:
6 Stories in height.
Answer: Under the eligibility rules, office buildings may qualify for
coverage under a BUSINESS OWNERS POLICY if they do not exceed
100,000 SQ Feet of space and do not exceed 6 stories in height.
◉ An insurance company has made an underwriting profit when...
Its combined ratio is less than 100%
Answer: The combined ration is the sum of the loss ration and the
expense ration. A combined ratio of less than 100% indicates that
