California Personal Lines Broker Test
{LATEST 2026 -2027 UPDATE} QUESTIONS
AND ANSWERS 100% CORRECT
A-31. Which of the following is not a class of insurance?
Casualty
Fire
Marine
Auto - correct answer Casualty is not a class of insurance.
A-32. Punishment for twisting or misrepresentation would be: - correct answer
$25,000 fine or 1 year in jail.
A-33. A beautician stating that this conditioner fixes badly damaged hair is a: - correct
answer Implied warranty.
A-34. Materiality is determined by the disadvantage placed on the other party and -
correct answer the influence of the facts, not by the event.
A-35. When an insured rejects uninsured motorist in writing this is considered: -
correct answer A waiver.
,A-11. Any contingent or unknown event, whether past or future, which may damnify a
person having an insurable interest or create a liability against him/her, may be
insured against. The more unpredictable a loss becomes: - correct answer The more
insurable it becomes.
A-12. Restoring the insured back to the condition he or she was in before the loss
occurred is known as: - correct answer Indemnification
A-13. The process of reviewing applications for insurance and the information on the
application is: - correct answer Underwriting
A-14. Which of the following is NOT a known private insurer?
Reciprocal Insurance Exchanges
Mutual Insurance Companies
Bond Insurance Companies
Stock Insurance Companies - correct answer Bond Insurance companies are not
considered insurers.
A-15. Bob is thinking about obtaining insurance because he just found out he needs
extensive surgery that will require several days in the hospital. This situation of
waiting until the last minute to obtain insurance is known as: - correct answer
Adverse selection
,A-16. Loss control refers to: - correct answer Taking the necessary precautions that
will reduce the risk of a loss.
A-17. Which of the following is the amount of money the insured pays before the
insurer pays for the rest of the claim? - correct answer Deductible
A-18. What is reinsurance? - correct answer Reinsurance is the process whereby the
insurer transfers all or part of the risk to another company.
A-19. Which of the following is defined as `an agreement between two or more parties
enforceable by law?` - correct answer A contract.
A-20. What are the two types of torts? - correct answer Intentional and Unintentional.
A-21. What is the binding force of a contract? - correct answer Consideration
A-22. What is fraud? - correct answer When one party intentionally gives the other
party false information in order to benefit from the unlawful gain.
, A-23. When a right or privilege has been given up, a party cannot reassert that right or
privilege. The process of preventing the party from reasserting that right or privilege is
known as: - correct answer Estoppel
A-24. Either party may rescind a contract for what reasons? - correct answer Once
signed a contract can never be rescinded.
A-25. Examples of tort law include all of the following EXCEPT:
Libel and slander
Bodily injury
Personal injury
Breach of contract - correct answer Breach of contract.
A-26. Substitution of a small certain loss for a large uncertain loss is: - correct
answer Insurance
A-27. The state of being subject to a loss is considered: - correct answer Exposure
A-28. Performance depends upon an uncertain future event is the feature: - correct
answer Aleatory
{LATEST 2026 -2027 UPDATE} QUESTIONS
AND ANSWERS 100% CORRECT
A-31. Which of the following is not a class of insurance?
Casualty
Fire
Marine
Auto - correct answer Casualty is not a class of insurance.
A-32. Punishment for twisting or misrepresentation would be: - correct answer
$25,000 fine or 1 year in jail.
A-33. A beautician stating that this conditioner fixes badly damaged hair is a: - correct
answer Implied warranty.
A-34. Materiality is determined by the disadvantage placed on the other party and -
correct answer the influence of the facts, not by the event.
A-35. When an insured rejects uninsured motorist in writing this is considered: -
correct answer A waiver.
,A-11. Any contingent or unknown event, whether past or future, which may damnify a
person having an insurable interest or create a liability against him/her, may be
insured against. The more unpredictable a loss becomes: - correct answer The more
insurable it becomes.
A-12. Restoring the insured back to the condition he or she was in before the loss
occurred is known as: - correct answer Indemnification
A-13. The process of reviewing applications for insurance and the information on the
application is: - correct answer Underwriting
A-14. Which of the following is NOT a known private insurer?
Reciprocal Insurance Exchanges
Mutual Insurance Companies
Bond Insurance Companies
Stock Insurance Companies - correct answer Bond Insurance companies are not
considered insurers.
A-15. Bob is thinking about obtaining insurance because he just found out he needs
extensive surgery that will require several days in the hospital. This situation of
waiting until the last minute to obtain insurance is known as: - correct answer
Adverse selection
,A-16. Loss control refers to: - correct answer Taking the necessary precautions that
will reduce the risk of a loss.
A-17. Which of the following is the amount of money the insured pays before the
insurer pays for the rest of the claim? - correct answer Deductible
A-18. What is reinsurance? - correct answer Reinsurance is the process whereby the
insurer transfers all or part of the risk to another company.
A-19. Which of the following is defined as `an agreement between two or more parties
enforceable by law?` - correct answer A contract.
A-20. What are the two types of torts? - correct answer Intentional and Unintentional.
A-21. What is the binding force of a contract? - correct answer Consideration
A-22. What is fraud? - correct answer When one party intentionally gives the other
party false information in order to benefit from the unlawful gain.
, A-23. When a right or privilege has been given up, a party cannot reassert that right or
privilege. The process of preventing the party from reasserting that right or privilege is
known as: - correct answer Estoppel
A-24. Either party may rescind a contract for what reasons? - correct answer Once
signed a contract can never be rescinded.
A-25. Examples of tort law include all of the following EXCEPT:
Libel and slander
Bodily injury
Personal injury
Breach of contract - correct answer Breach of contract.
A-26. Substitution of a small certain loss for a large uncertain loss is: - correct
answer Insurance
A-27. The state of being subject to a loss is considered: - correct answer Exposure
A-28. Performance depends upon an uncertain future event is the feature: - correct
answer Aleatory
