PSI CA PROPERTY AND CASUALTY
PRACTICE EXAM 2025 QUESTIONS AND
ANSWERS
1 Can a lender, as a condition of making a loan, require that any insurance be placed through a
particular insurance agent or broker? - ANS The loan recipient may always select a particular
agent or broker of their choosing
2 A claimant can be any of the following EXCEPT - ANS EXCEPT a person who is conducting an
investigation of a claim on behalf of an insurer
3 All of the following are to be specified in an insurance policy EXCEPT - ANS EXCEPT the
financial rating of the insured
4 Which of the following provisions of free insurance offered as an incentive to purchase or rent
property is TRUE? - ANS It requires a separate charge or fee
5 What is the method used for placing business with the California Automobile Assigned Risk
Program? - ANS The percentage of CAARP policies required is equal to the percentage of
regular insurance policies the insurer has issued within the State
6 Whether admitted or nonadmitted, how does a "foreign" insurer differ from an "alien" or
"domestic" insurer? - ANS A "foreign" insurer is organized under the laws of another state
within the United States
7 All of the following are reasons employers liability insurance is needed in addition to workers'
compensation insurance EXCEPT - ANS EXCEPT to pay medical bills
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, 8 What is the purpose of the experience modification system in the California workers'
compensation experience rating system? - ANS It expresses a particular company's loss or
claims history as a percentage to all other companies in the industry
9 Which form of negotiation is covered under the definition of "transact" as applied to
insurance? - ANS Negotiations preliminary to execution
10 Which type of coverage protects against loss caused by earth movement? - ANS A stand-
alone Earthquake Insurance policy specifically insuring against loss caused by land subsidence
11 Which circumstances in a pretext interview determine if the questions are permissible? -
ANS When an insured is consulted by a person who hides his true identity on purpose when
fraud for a claim is suspected
12 Which is TRUE regarding expectant or contingent interest? - ANS Expectant or contingent
interest does NOT constitute insurable interest
13 "Person" means all of the following EXCEPT - ANS EXCEPT an organizational trust
14 Which of the following is TRUE regarding continuing education requirements of an agent or
broker? - ANS Any licensee shall satisfactorily complete 24 hours of instruction prior to
license renewal.
15 Except in a case where the property is being held as a carrier or depository, what is the
insurable interest is measured by? - ANS EXCEPT The extent to which the insured would be
damnified by loss or injury to the property
16 All of the following are included as definitions of "transact" as applied to insurance EXCEPT -
ANS EXCEPT underwriting
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PRACTICE EXAM 2025 QUESTIONS AND
ANSWERS
1 Can a lender, as a condition of making a loan, require that any insurance be placed through a
particular insurance agent or broker? - ANS The loan recipient may always select a particular
agent or broker of their choosing
2 A claimant can be any of the following EXCEPT - ANS EXCEPT a person who is conducting an
investigation of a claim on behalf of an insurer
3 All of the following are to be specified in an insurance policy EXCEPT - ANS EXCEPT the
financial rating of the insured
4 Which of the following provisions of free insurance offered as an incentive to purchase or rent
property is TRUE? - ANS It requires a separate charge or fee
5 What is the method used for placing business with the California Automobile Assigned Risk
Program? - ANS The percentage of CAARP policies required is equal to the percentage of
regular insurance policies the insurer has issued within the State
6 Whether admitted or nonadmitted, how does a "foreign" insurer differ from an "alien" or
"domestic" insurer? - ANS A "foreign" insurer is organized under the laws of another state
within the United States
7 All of the following are reasons employers liability insurance is needed in addition to workers'
compensation insurance EXCEPT - ANS EXCEPT to pay medical bills
1 Copyright ©BRIGHSTARS ALL RIGHTS RESERVED 2025
, 8 What is the purpose of the experience modification system in the California workers'
compensation experience rating system? - ANS It expresses a particular company's loss or
claims history as a percentage to all other companies in the industry
9 Which form of negotiation is covered under the definition of "transact" as applied to
insurance? - ANS Negotiations preliminary to execution
10 Which type of coverage protects against loss caused by earth movement? - ANS A stand-
alone Earthquake Insurance policy specifically insuring against loss caused by land subsidence
11 Which circumstances in a pretext interview determine if the questions are permissible? -
ANS When an insured is consulted by a person who hides his true identity on purpose when
fraud for a claim is suspected
12 Which is TRUE regarding expectant or contingent interest? - ANS Expectant or contingent
interest does NOT constitute insurable interest
13 "Person" means all of the following EXCEPT - ANS EXCEPT an organizational trust
14 Which of the following is TRUE regarding continuing education requirements of an agent or
broker? - ANS Any licensee shall satisfactorily complete 24 hours of instruction prior to
license renewal.
15 Except in a case where the property is being held as a carrier or depository, what is the
insurable interest is measured by? - ANS EXCEPT The extent to which the insured would be
damnified by loss or injury to the property
16 All of the following are included as definitions of "transact" as applied to insurance EXCEPT -
ANS EXCEPT underwriting
2 Copyright ©BRIGHSTARS ALL RIGHTS RESERVED 2025
