Personal Lines Study Guide UPDATED
Exam Questions and CORRECT Answers
Insolvent - CORRECT ANSWER - Describes an insurer with insufficient financial
resources for liabilities.
Unendorsed homeowners policy - CORRECT ANSWER - Covers fire damage to the
ceiling and clothes dryer.
Personal injury endorsement - CORRECT ANSWER - Adds liability protection for false
arrests, libel, and slander.
Additional coverage - CORRECT ANSWER - Includes trees, shrubs, and other plants in
an HO3 policy.
Comparative negligence - CORRECT ANSWER - Does not require a person to be entirely
free from negligence to collect damages.
Personal automobile policy coverage - CORRECT ANSWER - Pays for repairing a
neighbor's fence damaged through negligent car operation.
Scheduled personal property endorsement - CORRECT ANSWER - Provides open peril
coverage for personal possessions like jewelry, fur, and cameras.
HO3 policy - CORRECT ANSWER - Covers damage caused by ensuing fire and
explosion after an earthquake.
California Earthquake Authority policies - CORRECT ANSWER - Marketed and serviced
by the state of California.
, Actual cash value - CORRECT ANSWER - The limit of liability for damage to an
automobile in a personal auto policy.
Earned premium - CORRECT ANSWER - The premium for which protection has been
provided.
Grace period - CORRECT ANSWER - Offers 45 days for premium payment during a
declared state of emergency.
Minimum limit - CORRECT ANSWER - The required amount for several people injured
in one accident under the Financial Responsibility Law in California.
All risk coverage - CORRECT ANSWER - A policy that contains no excluded perils.
Principal rating factor - CORRECT ANSWER - Determines the premium for a personal
auto policy based on the type of vehicle insured.
Insurer payment for damage - CORRECT ANSWER - Pays $1050 for damage to the
insured car in a personal auto policy.
Special limit for theft - CORRECT ANSWER - Applies to jewelry as subject to a special
limit in property insurance.
Federal government insurance programs - CORRECT ANSWER - Exist due to the amount
of resources needed for catastrophic losses.
Excess and surplus lines coverage - CORRECT ANSWER - Needs to be placed through a
surplus lines broker in California.
Insured under a personal auto policy - CORRECT ANSWER - Includes the named
insured, resident relatives, and passengers while using a covered auto.
Exam Questions and CORRECT Answers
Insolvent - CORRECT ANSWER - Describes an insurer with insufficient financial
resources for liabilities.
Unendorsed homeowners policy - CORRECT ANSWER - Covers fire damage to the
ceiling and clothes dryer.
Personal injury endorsement - CORRECT ANSWER - Adds liability protection for false
arrests, libel, and slander.
Additional coverage - CORRECT ANSWER - Includes trees, shrubs, and other plants in
an HO3 policy.
Comparative negligence - CORRECT ANSWER - Does not require a person to be entirely
free from negligence to collect damages.
Personal automobile policy coverage - CORRECT ANSWER - Pays for repairing a
neighbor's fence damaged through negligent car operation.
Scheduled personal property endorsement - CORRECT ANSWER - Provides open peril
coverage for personal possessions like jewelry, fur, and cameras.
HO3 policy - CORRECT ANSWER - Covers damage caused by ensuing fire and
explosion after an earthquake.
California Earthquake Authority policies - CORRECT ANSWER - Marketed and serviced
by the state of California.
, Actual cash value - CORRECT ANSWER - The limit of liability for damage to an
automobile in a personal auto policy.
Earned premium - CORRECT ANSWER - The premium for which protection has been
provided.
Grace period - CORRECT ANSWER - Offers 45 days for premium payment during a
declared state of emergency.
Minimum limit - CORRECT ANSWER - The required amount for several people injured
in one accident under the Financial Responsibility Law in California.
All risk coverage - CORRECT ANSWER - A policy that contains no excluded perils.
Principal rating factor - CORRECT ANSWER - Determines the premium for a personal
auto policy based on the type of vehicle insured.
Insurer payment for damage - CORRECT ANSWER - Pays $1050 for damage to the
insured car in a personal auto policy.
Special limit for theft - CORRECT ANSWER - Applies to jewelry as subject to a special
limit in property insurance.
Federal government insurance programs - CORRECT ANSWER - Exist due to the amount
of resources needed for catastrophic losses.
Excess and surplus lines coverage - CORRECT ANSWER - Needs to be placed through a
surplus lines broker in California.
Insured under a personal auto policy - CORRECT ANSWER - Includes the named
insured, resident relatives, and passengers while using a covered auto.
