California Personal Lines Broker Test questions with answers

California Personal Lines Broker Test |\ |\ |\ |\ |\




questions with answers |\ |\




A-1. Insurance is a contract whereby one undertakes to indemnify
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another against: - CORRECT ANSWERS ✔✔Damage
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A-2. A peril is: - CORRECT ANSWERS ✔✔The actual cause of a
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loss.


A-3. The uncertainty or chance of a loss occurring is known as: -
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CORRECT ANSWERS ✔✔Risk |\ |\




A-4. Which are the main types of risks? - CORRECT ANSWERS
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✔✔Pure and Speculative
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A-5. A hazard is best defined as: - CORRECT ANSWERS
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✔✔Anything that increases the chance of loss or severity of loss
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due to a peril.
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A-6. A hazard that deals with a person`s mental attitude,
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behavior and habits is an example of: - CORRECT ANSWERS ✔✔A
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Moral hazard.
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A-7. The law of large numbers is a principal that basically says: -
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CORRECT ANSWERS ✔✔The larger the amount of information
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gathered, the more reliable that information will be.
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,A-8. The term loss exposure refers to: - CORRECT ANSWERS
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✔✔The possibility of a loss. |\ |\ |\ |\




A-9. The degree of loss a person/organization faces from suits
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brought by a third party refers to: - CORRECT ANSWERS
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✔✔Liability loss exposure. |\ |\




A-10. Which of the following is NOT required for a risk to be
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ideally insurable? |\ |\




|\ The loss must be an accident.
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|\ The loss must be definite and measurable.
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|\ The loss must occur on the insured`s property.
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The loss must create economic hardship. - CORRECT ANSWERS
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✔✔The loss must occur on the insured's property.
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A-11. Any contingent or unknown event, whether past or future,
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which may damnify a person having an insurable interest or
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create a liability against him/her, may be insured against. The
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more unpredictable a loss becomes: - CORRECT ANSWERS
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✔✔The more insurable it becomes.|\ |\ |\ |\




A-12. Restoring the insured back to the condition he or she was
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in before the loss occurred is known as: - CORRECT ANSWERS
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✔✔Indemnification


A-13. The process of reviewing applications for insurance and the
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information on the application is: - CORRECT ANSWERS
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✔✔Underwriting

,A-14. Which of the following is NOT a known private insurer?
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|\ Reciprocal Insurance Exchanges |\ |\




|\ Mutual Insurance Companies |\ |\




|\ Bond Insurance Companies
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Stock Insurance Companies - CORRECT ANSWERS ✔✔Bond
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Insurance companies are not considered insurers. |\ |\ |\ |\ |\




A-15. Bob is thinking about obtaining insurance because he just
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found out he needs extensive surgery that will require several
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days in the hospital. This situation of waiting until the last minute
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to obtain insurance is known as: - CORRECT ANSWERS
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✔✔Adverse selection |\




A-16. Loss control refers to: - CORRECT ANSWERS ✔✔Taking the
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necessary precautions that will reduce the risk of a loss.
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A-17. Which of the following is the amount of money the insured
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pays before the insurer pays for the rest of the claim? - CORRECT
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ANSWERS ✔✔Deductible
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A-18. What is reinsurance? - CORRECT ANSWERS ✔✔Reinsurance
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is the process whereby the insurer transfers all or part of the risk
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to another company.
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A-19. Which of the following is defined as `an agreement
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between two or more parties enforceable by law?` - CORRECT
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ANSWERS ✔✔A contract. |\ |\

, A-20. What are the two types of torts? - CORRECT ANSWERS
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✔✔Intentional and Unintentional. |\ |\




A-21. What is the binding force of a contract? - CORRECT
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ANSWERS ✔✔Consideration |\




A-22. What is fraud? - CORRECT ANSWERS ✔✔When one party
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intentionally gives the other party false information in order to
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benefit from the unlawful gain.
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A-23. When a right or privilege has been given up, a party cannot
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reassert that right or privilege. The process of preventing the
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party from reasserting that right or privilege is known as: -
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CORRECT ANSWERS ✔✔Estoppel |\ |\




A-24. Either party may rescind a contract for what reasons? -
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CORRECT ANSWERS ✔✔Once signed a contract can never be
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rescinded.


A-25. Examples of tort law include all of the following EXCEPT:
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|\ Libel and slander
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|\ Bodily injury
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|\ Personal injury |\




|\ Breach of contract - CORRECT ANSWERS ✔✔Breach of contract.
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