CALIFORNIA PROPERTY AND
CASUALTY INSURANCE EXAM
QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS 100% CORRECT
RATED A+ NEWLY UPDATED 2025
1. What discount is required under a Good Driver Discount policy?
A) 10% below standard rate
B) 15% below standard rate
C) 20% below standard rate
D) 25% below standard rate
✔✔ Correct Answer: C) 20% below the rate the insured would otherwise pay for
the same coverage
2. Which of the following activities is not permitted for a Limited Automobile
Insurance Agent?
A) Selling liability insurance for private passenger cars
B) Assisting with the execution of policies
C) Charging and collecting a broker’s fee for service
D) Providing renewals to existing clients
✔✔ Correct Answer: C) Charging and collecting a broker’s fee for service
3. What is the correct procedure for a policyholder to refuse Uninsured
Motorist (UM) coverage?
A) By refusing coverage verbally
B) By ticking a box on the application
C) By stating in writing before policy issuance or renewal
D) No action needed, UM is optional
✔✔ Correct Answer: C) The insured must put the refusal in writing before the
policy is issued or renewed
, 4. How many classes of insurance are defined under California law, including
“miscellaneous” and “reserved”?
A) 12
B) 15
C) 18
D) 20
✔✔ Correct Answer: D) There are a total of 20 classes of insurance defined
under California law, including sub-classes
5. When can a real estate seller require a buyer to use a specific insurance
professional?
A) When it’s written into the contract
B) If both parties agree
C) When the buyer requests it
D) Never – the buyer may choose their own representative
✔✔ Correct Answer: D) A buyer always has the right to select their own
insurance agent, broker, or solicitor
6. Which factor is not required to determine eligibility for low-cost automobile
insurance?
A) Household income level
B) Primary place of residence
C) Number of auto accidents in the area
D) Vehicle use (e.g., commute)
✔✔ Correct Answer: C) The number of auto accidents in the area is not a
determining factor
7. What best describes a reinsurance agreement?
A) An agreement between policyholder and insurer
B) A policy sold on behalf of another company
CASUALTY INSURANCE EXAM
QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS 100% CORRECT
RATED A+ NEWLY UPDATED 2025
1. What discount is required under a Good Driver Discount policy?
A) 10% below standard rate
B) 15% below standard rate
C) 20% below standard rate
D) 25% below standard rate
✔✔ Correct Answer: C) 20% below the rate the insured would otherwise pay for
the same coverage
2. Which of the following activities is not permitted for a Limited Automobile
Insurance Agent?
A) Selling liability insurance for private passenger cars
B) Assisting with the execution of policies
C) Charging and collecting a broker’s fee for service
D) Providing renewals to existing clients
✔✔ Correct Answer: C) Charging and collecting a broker’s fee for service
3. What is the correct procedure for a policyholder to refuse Uninsured
Motorist (UM) coverage?
A) By refusing coverage verbally
B) By ticking a box on the application
C) By stating in writing before policy issuance or renewal
D) No action needed, UM is optional
✔✔ Correct Answer: C) The insured must put the refusal in writing before the
policy is issued or renewed
, 4. How many classes of insurance are defined under California law, including
“miscellaneous” and “reserved”?
A) 12
B) 15
C) 18
D) 20
✔✔ Correct Answer: D) There are a total of 20 classes of insurance defined
under California law, including sub-classes
5. When can a real estate seller require a buyer to use a specific insurance
professional?
A) When it’s written into the contract
B) If both parties agree
C) When the buyer requests it
D) Never – the buyer may choose their own representative
✔✔ Correct Answer: D) A buyer always has the right to select their own
insurance agent, broker, or solicitor
6. Which factor is not required to determine eligibility for low-cost automobile
insurance?
A) Household income level
B) Primary place of residence
C) Number of auto accidents in the area
D) Vehicle use (e.g., commute)
✔✔ Correct Answer: C) The number of auto accidents in the area is not a
determining factor
7. What best describes a reinsurance agreement?
A) An agreement between policyholder and insurer
B) A policy sold on behalf of another company
