PERSONAL LINES INSURANCE PRACTICE
EXAM CALIFORNIA COMPLETE EXAM
PREP STUDY GUIDE WITH PRACTICE
QUESTIONS, ANSWERS AND
COMPREHENSIVE INSURANCE REVIEW|
GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers | 100% Verified
Exam Prep
,A parking valet at a hotel uses a guest's car to do a personal C) subrogate against the parking valet
errand and damages the car in a collision. The guest has a
personal auto policy (PAP). The insurance company will pay Explanation: Part-D coverage for Damage to Your Auto of the PAP contains a no benefit
the claim and ____. to bailee provision. This provision states that a carrier or other bailee for hire, such as a
parking gar5age, service station, or moving company will not directly or indirectly benefit
A) relieve the parking valet of legal liability for the loss from the PAP's insurance. A bailee is an individual or entity that assumes possession of
B) subrogate against the named insured goods owned by another for the purpose of transporting, servicing, or storing them.
C) subrogate against the parking valet When temporary custody is assumed, the bailee becomes legally liable for the goods.
D) recover any additional loss from the lienholder
Reference: 8.7.2 in the License Exam Manual
Who of the following are required to be members of the A) All insurers that write the types of insurance that are protected by the fund in Arizona
Arizona Property and Casualty Insurance Guaranty Fund?
Explanation: All insurers that write types of insurance that are protected by the fund are
A) All insurers that write the types of insurance that are required to be member insurers of the fund. Reference: State Supplement in the License
protected by the fund in Arizona Exam Manual.
B) Foreign property and casualty insurers only
C) lien property and casualty insurers only Reference: 4.4.16.3 in the License Exam Manual
D) All insurers that write insurance in Arizona, including life
and health insurers
Which one of the following dwellings would a HO-3 C) Single-family home
Homeowners Form cover?
Explanation: HO-3 Homeowners Form covers owner-occupied single family dwellings.
A) Condominium Condominiums are covered by the HO-6. Office and apartment buildings would be
B) Office building covered by a commercial policy.
C) Single-family home
D) Apartment building Reference: 7.4.1 in the License Exam Manual
Which on of the following would be classified as a general A) Pain and suffering
damage?
Explanation: Compensatory damages compensate an injured party for injuries sustained-
A) Pain and suffering nothing more. Their purpose is to make a person whole again in the position that existed
B) Lost wages before the loss or harm. Compensatory damages are further categorized by: general
C) Medical bills damages (which necessarily result from the act or omission, such as emotional distress,
D) Damaged property inconvenience, and pain and suffering) and special damages (losses measured in exact
sums of money including medical bills, travel expenses for medical care, prescription
costs damaged property, and lost wages).
Reference: 5.3.6 in the License Exam Manual
,Which of the following statements about flood insurance is D) Personal property in a basement or outside in the yard is covered
NOT correct?
Explanation: Personal property in a basement or outside in the yard is NOT covered
A) There are two types of flood insurance programs available: under flood insurance.
emergency and regular
B) A flood includes an overflow of inland or tidal waters Reference: 9.4 in the License Exam Manual
C) Sewer backup into a dwelling is not considered flood and
is not covered
D) Personal property in a basement or outside in the yard is
covered
Which of the following coverages is NOT included in a C) Longshore and harbor workers' compensation insurance
boatowners/watercraft package policy?
Explanation: Boatowners/watercraft package policies were developed by individual
A) Medical payments insurance companies and they combine property, liability, and medical payments
B) Liability insurance on an open peril basis. Longshore and harbor workers' compensation
C) Longshore and harbor workers' compensation insurance insurance is found in personal yacht policies, which are used to insure larger vessels than
D) Property those covered under boatowners policies.
Reference: 9.8.1 in the License Exam Manual
An insured owns a pet lion that is caged on the homeowner's A) Absolute liability
property. The owner takes great care to warn neighbors of the
possible danger by posting signs, fencing the yard, and Explanation: The law imposes strict or absolute liability for specific situations or activities
locking the cage at all times. When a neighbor's child manages that pose threats to the safety of others. People who own dangerous animals are held to
to open the cage and is bitten, what type of liability would a higher standard of care. Absolute liability applies when a person is liable for a
apply to the lion owner? dangerous condition, regardless of the amount of care taken.
A) Absolute liability Reference: 5.3.4 in the License Exam Manual
B) Contractual liability
C) Premises liability
D) Vicarious liability
, Which of the following terms is used to describe an empty D) Vacant
building that is not being used?
Explanation: A building that is not currently in use and does not have enough furnishings
A) Vacated to function in its normal capacity is considered vacant. A building is unoccupied if no one
B) Absent is currently in it, but furnishings are present and the occupants intended to return, as is
C) Unoccupied the case when the residents are out of town on vacation.
D) Vacant
Reference: 4.4.15 in the License Exam Manual
Which of the following statements about umbrella policies is B) They are written only for commercial risks.
NOT correct?
Explanation: Umbrella liability policies may be written for both personal and commercial
A) They provide coverage above the limits of underlying risks.
policies.
B) They are written only for commercial risks. Reference: 9.9.1 in the License Exam Manual
C) Losses that are excluded by the underlying policy but
covered by the umbrella are subject to the umbrella's
retention limit.
D) If the insured fails to keep the underlying coverage in force,
the umbrella policy will not cover the amount of loss that
would have been paid by the underlying policy.
The agent has many responsibilities to the applicant. One A) Fiduciary
involves a trust relationship between the agent and the insured
regarding the insured's finances and confidentiality. In this Explanation: Agents have the duty to act in a fiduciary capacity that requires a high
case, the agent acts in what capacity? degree of trust and confidence. This duty deals with the agent's dealings with both the
insured and the insurer. The agent is expected to be trustworthy, act in good faith, and
A) Fiduciary preserve confidential information.
B) Consultant
C) Attorney-in-fact Reference: 1.9.2 in the License Exam Manual
D) Special agent
Thomas had a forklift injury at work that caused his death. How D) Up to $5,000
much money will his surviving spouse receive for burial
expenses? Explanation: Burial expenses, not to exceed $5,000, are in addition to the compensation.
A) Up to $10,000 Reference: See State Supplement
B) Up to $1,000
C) Up to $2,500
D) Up to $5,000
EXAM CALIFORNIA COMPLETE EXAM
PREP STUDY GUIDE WITH PRACTICE
QUESTIONS, ANSWERS AND
COMPREHENSIVE INSURANCE REVIEW|
GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers | 100% Verified
Exam Prep
,A parking valet at a hotel uses a guest's car to do a personal C) subrogate against the parking valet
errand and damages the car in a collision. The guest has a
personal auto policy (PAP). The insurance company will pay Explanation: Part-D coverage for Damage to Your Auto of the PAP contains a no benefit
the claim and ____. to bailee provision. This provision states that a carrier or other bailee for hire, such as a
parking gar5age, service station, or moving company will not directly or indirectly benefit
A) relieve the parking valet of legal liability for the loss from the PAP's insurance. A bailee is an individual or entity that assumes possession of
B) subrogate against the named insured goods owned by another for the purpose of transporting, servicing, or storing them.
C) subrogate against the parking valet When temporary custody is assumed, the bailee becomes legally liable for the goods.
D) recover any additional loss from the lienholder
Reference: 8.7.2 in the License Exam Manual
Who of the following are required to be members of the A) All insurers that write the types of insurance that are protected by the fund in Arizona
Arizona Property and Casualty Insurance Guaranty Fund?
Explanation: All insurers that write types of insurance that are protected by the fund are
A) All insurers that write the types of insurance that are required to be member insurers of the fund. Reference: State Supplement in the License
protected by the fund in Arizona Exam Manual.
B) Foreign property and casualty insurers only
C) lien property and casualty insurers only Reference: 4.4.16.3 in the License Exam Manual
D) All insurers that write insurance in Arizona, including life
and health insurers
Which one of the following dwellings would a HO-3 C) Single-family home
Homeowners Form cover?
Explanation: HO-3 Homeowners Form covers owner-occupied single family dwellings.
A) Condominium Condominiums are covered by the HO-6. Office and apartment buildings would be
B) Office building covered by a commercial policy.
C) Single-family home
D) Apartment building Reference: 7.4.1 in the License Exam Manual
Which on of the following would be classified as a general A) Pain and suffering
damage?
Explanation: Compensatory damages compensate an injured party for injuries sustained-
A) Pain and suffering nothing more. Their purpose is to make a person whole again in the position that existed
B) Lost wages before the loss or harm. Compensatory damages are further categorized by: general
C) Medical bills damages (which necessarily result from the act or omission, such as emotional distress,
D) Damaged property inconvenience, and pain and suffering) and special damages (losses measured in exact
sums of money including medical bills, travel expenses for medical care, prescription
costs damaged property, and lost wages).
Reference: 5.3.6 in the License Exam Manual
,Which of the following statements about flood insurance is D) Personal property in a basement or outside in the yard is covered
NOT correct?
Explanation: Personal property in a basement or outside in the yard is NOT covered
A) There are two types of flood insurance programs available: under flood insurance.
emergency and regular
B) A flood includes an overflow of inland or tidal waters Reference: 9.4 in the License Exam Manual
C) Sewer backup into a dwelling is not considered flood and
is not covered
D) Personal property in a basement or outside in the yard is
covered
Which of the following coverages is NOT included in a C) Longshore and harbor workers' compensation insurance
boatowners/watercraft package policy?
Explanation: Boatowners/watercraft package policies were developed by individual
A) Medical payments insurance companies and they combine property, liability, and medical payments
B) Liability insurance on an open peril basis. Longshore and harbor workers' compensation
C) Longshore and harbor workers' compensation insurance insurance is found in personal yacht policies, which are used to insure larger vessels than
D) Property those covered under boatowners policies.
Reference: 9.8.1 in the License Exam Manual
An insured owns a pet lion that is caged on the homeowner's A) Absolute liability
property. The owner takes great care to warn neighbors of the
possible danger by posting signs, fencing the yard, and Explanation: The law imposes strict or absolute liability for specific situations or activities
locking the cage at all times. When a neighbor's child manages that pose threats to the safety of others. People who own dangerous animals are held to
to open the cage and is bitten, what type of liability would a higher standard of care. Absolute liability applies when a person is liable for a
apply to the lion owner? dangerous condition, regardless of the amount of care taken.
A) Absolute liability Reference: 5.3.4 in the License Exam Manual
B) Contractual liability
C) Premises liability
D) Vicarious liability
, Which of the following terms is used to describe an empty D) Vacant
building that is not being used?
Explanation: A building that is not currently in use and does not have enough furnishings
A) Vacated to function in its normal capacity is considered vacant. A building is unoccupied if no one
B) Absent is currently in it, but furnishings are present and the occupants intended to return, as is
C) Unoccupied the case when the residents are out of town on vacation.
D) Vacant
Reference: 4.4.15 in the License Exam Manual
Which of the following statements about umbrella policies is B) They are written only for commercial risks.
NOT correct?
Explanation: Umbrella liability policies may be written for both personal and commercial
A) They provide coverage above the limits of underlying risks.
policies.
B) They are written only for commercial risks. Reference: 9.9.1 in the License Exam Manual
C) Losses that are excluded by the underlying policy but
covered by the umbrella are subject to the umbrella's
retention limit.
D) If the insured fails to keep the underlying coverage in force,
the umbrella policy will not cover the amount of loss that
would have been paid by the underlying policy.
The agent has many responsibilities to the applicant. One A) Fiduciary
involves a trust relationship between the agent and the insured
regarding the insured's finances and confidentiality. In this Explanation: Agents have the duty to act in a fiduciary capacity that requires a high
case, the agent acts in what capacity? degree of trust and confidence. This duty deals with the agent's dealings with both the
insured and the insurer. The agent is expected to be trustworthy, act in good faith, and
A) Fiduciary preserve confidential information.
B) Consultant
C) Attorney-in-fact Reference: 1.9.2 in the License Exam Manual
D) Special agent
Thomas had a forklift injury at work that caused his death. How D) Up to $5,000
much money will his surviving spouse receive for burial
expenses? Explanation: Burial expenses, not to exceed $5,000, are in addition to the compensation.
A) Up to $10,000 Reference: See State Supplement
B) Up to $1,000
C) Up to $2,500
D) Up to $5,000
