CALIFORNIA PERSONAL LINES BROKER
TEST COMPLETE EXAM PREP STUDY
GUIDE WITH PRACTICE QUESTIONS,
ANSWERS AND COMPREHENSIVE
INSURANCE LICENSE REVIEW | GRADED
A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers | 100% Verified
Exam Prep
,A-6. A hazard that deals with a person`s mental attitude, A Moral hazard.
behavior and habits is an example of:
A-7. The law of large numbers is a principal that basically says: The larger the amount of information gathered, the more reliable that information will be.
A-8. The term loss exposure refers to: The possibility of a loss.
A-9. The degree of loss a person/organization faces from suits Liability loss exposure.
brought by a third party refers to:
A-10. Which of the following is NOT required for a risk to be The loss must occur on the insured's property.
ideally insurable?
The loss must be an accident.
The loss must be definite and measurable.
The loss must occur on the insured`s property.
The loss must create economic hardship.
A-11. Any contingent or unknown event, whether past or future, The more insurable it becomes.
which may damnify a person having an insurable interest or
create a liability against him/her, may be insured against. The
more unpredictable a loss becomes:
A-12. Restoring the insured back to the condition he or she Indemnification
was in before the loss occurred is known as:
A-13. The process of reviewing applications for insurance and Underwriting
the information on the application is:
A-14. Which of the following is NOT a known private insurer? Bond Insurance companies are not considered insurers.
Reciprocal Insurance Exchanges
Mutual Insurance Companies
Bond Insurance Companies
Stock Insurance Companies
A-15. Bob is thinking about obtaining insurance because he Adverse selection
just found out he needs extensive surgery that will require
several days in the hospital. This situation of waiting until the
last minute to obtain insurance is known as:
,A-16. Loss control refers to: Taking the necessary precautions that will reduce the risk of a loss.
A-17. Which of the following is the amount of money the Deductible
insured pays before the insurer pays for the rest of the claim?
A-18. What is reinsurance? Reinsurance is the process whereby the insurer transfers all or part of the risk to another
company.
A-19. Which of the following is defined as `an agreement A contract.
between two or more parties enforceable by law?`
A-20. What are the two types of torts? Intentional and Unintentional.
A-21. What is the binding force of a contract? Consideration
A-22. What is fraud? When one party intentionally gives the other party false information in order to benefit
from the unlawful gain.
A-23. When a right or privilege has been given up, a party Estoppel
cannot reassert that right or privilege. The process of
preventing the party from reasserting that right or privilege is
known as:
A-24. Either party may rescind a contract for what reasons? Once signed a contract can never be rescinded.
A-25. Examples of tort law include all of the following EXCEPT: Breach of contract.
Libel and slander
Bodily injury
Personal injury
Breach of contract
A-26. Substitution of a small certain loss for a large uncertain Insurance
loss is:
A-27. The state of being subject to a loss is considered: Exposure
, A-28. Performance depends upon an uncertain future event is Aleatory
the feature:
A-29. Type of loss exposure pertaining to land and structures Property loss exposure.
attached to it is:
A-30. Which of the following is an example of an adverse All are examples.
underwriting decision?
Charging a higher rate
Rejecting the risk
Issuing with limitations
All of these are examples
A-31. Which of the following is not a class of insurance? Casualty is not a class of insurance.
Casualty
Fire
Marine
Auto
A-32. Punishment for twisting or misrepresentation would be: $25,000 fine or 1 year in jail.
A-33. A beautician stating that this conditioner fixes badly Implied warranty.
damaged hair is a:
A-34. Materiality is determined by the disadvantage placed on the influence of the facts, not by the event.
the other party and
A-35. When an insured rejects uninsured motorist in writing A waiver.
this is considered:
B-1. In which of the following marketing distribution systems An independent agency
does the agent represent more than one insurer and more
than one company?
Direct mailing system
Direct writing system
Exclusive agency
Independent agency
TEST COMPLETE EXAM PREP STUDY
GUIDE WITH PRACTICE QUESTIONS,
ANSWERS AND COMPREHENSIVE
INSURANCE LICENSE REVIEW | GRADED
A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers | 100% Verified
Exam Prep
,A-6. A hazard that deals with a person`s mental attitude, A Moral hazard.
behavior and habits is an example of:
A-7. The law of large numbers is a principal that basically says: The larger the amount of information gathered, the more reliable that information will be.
A-8. The term loss exposure refers to: The possibility of a loss.
A-9. The degree of loss a person/organization faces from suits Liability loss exposure.
brought by a third party refers to:
A-10. Which of the following is NOT required for a risk to be The loss must occur on the insured's property.
ideally insurable?
The loss must be an accident.
The loss must be definite and measurable.
The loss must occur on the insured`s property.
The loss must create economic hardship.
A-11. Any contingent or unknown event, whether past or future, The more insurable it becomes.
which may damnify a person having an insurable interest or
create a liability against him/her, may be insured against. The
more unpredictable a loss becomes:
A-12. Restoring the insured back to the condition he or she Indemnification
was in before the loss occurred is known as:
A-13. The process of reviewing applications for insurance and Underwriting
the information on the application is:
A-14. Which of the following is NOT a known private insurer? Bond Insurance companies are not considered insurers.
Reciprocal Insurance Exchanges
Mutual Insurance Companies
Bond Insurance Companies
Stock Insurance Companies
A-15. Bob is thinking about obtaining insurance because he Adverse selection
just found out he needs extensive surgery that will require
several days in the hospital. This situation of waiting until the
last minute to obtain insurance is known as:
,A-16. Loss control refers to: Taking the necessary precautions that will reduce the risk of a loss.
A-17. Which of the following is the amount of money the Deductible
insured pays before the insurer pays for the rest of the claim?
A-18. What is reinsurance? Reinsurance is the process whereby the insurer transfers all or part of the risk to another
company.
A-19. Which of the following is defined as `an agreement A contract.
between two or more parties enforceable by law?`
A-20. What are the two types of torts? Intentional and Unintentional.
A-21. What is the binding force of a contract? Consideration
A-22. What is fraud? When one party intentionally gives the other party false information in order to benefit
from the unlawful gain.
A-23. When a right or privilege has been given up, a party Estoppel
cannot reassert that right or privilege. The process of
preventing the party from reasserting that right or privilege is
known as:
A-24. Either party may rescind a contract for what reasons? Once signed a contract can never be rescinded.
A-25. Examples of tort law include all of the following EXCEPT: Breach of contract.
Libel and slander
Bodily injury
Personal injury
Breach of contract
A-26. Substitution of a small certain loss for a large uncertain Insurance
loss is:
A-27. The state of being subject to a loss is considered: Exposure
, A-28. Performance depends upon an uncertain future event is Aleatory
the feature:
A-29. Type of loss exposure pertaining to land and structures Property loss exposure.
attached to it is:
A-30. Which of the following is an example of an adverse All are examples.
underwriting decision?
Charging a higher rate
Rejecting the risk
Issuing with limitations
All of these are examples
A-31. Which of the following is not a class of insurance? Casualty is not a class of insurance.
Casualty
Fire
Marine
Auto
A-32. Punishment for twisting or misrepresentation would be: $25,000 fine or 1 year in jail.
A-33. A beautician stating that this conditioner fixes badly Implied warranty.
damaged hair is a:
A-34. Materiality is determined by the disadvantage placed on the influence of the facts, not by the event.
the other party and
A-35. When an insured rejects uninsured motorist in writing A waiver.
this is considered:
B-1. In which of the following marketing distribution systems An independent agency
does the agent represent more than one insurer and more
than one company?
Direct mailing system
Direct writing system
Exclusive agency
Independent agency
