CA property & Casualty practice Exam
(Latest ) Tested Questions with
Revised Answers, (A+ Guarantee)
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 ANSWERS Adverse Selection
According to the California insurance law, either party may rescind a contract for any of the following
reasons EXCEPT: - CORRECT ANSWERS
One party intentionally omits information from the other party. - CORRECT ANSWERS
If a representation is false in a material point, whether affirmative or promissory, the injured party is
entitled to rescind the contract. - CORRECT ANSWERS
Once a contract is signed, it can never be rescinded. - CORRECT ANSWERS
One party intentionally or unintentionally hides material information. - CORRECT ANSWERS
#3 - CORRECT ANSWERS
Which of the following are the main types of risks? - CORRECT ANSWERS
Sharing and Transfer - CORRECT ANSWERS
Avoidance and Retention - CORRECT ANSWERS
Pure and Transfer - CORRECT ANSWERS
Speculative and pure - CORRECT ANSWERS
#4 - CORRECT ANSWERS
What are the two types of torts? - CORRECT ANSWERS
Intentional & Unintentional - CORRECT ANSWERS
Legal & Non-Legal - CORRECT ANSWERS
Pure & Speculative - CORRECT ANSWERS
Broad & Basic - CORRECT ANSWERS
#5 - CORRECT ANSWERS
,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 ANSWERS
Indemnity - CORRECT ANSWERS
Estoppel - CORRECT ANSWERS
Pro-rata - CORRECT ANSWERS
Waiver - CORRECT ANSWERS
#6 - CORRECT ANSWERS
Which of the following is the amount of money the insured pays before the insurer pays for the rest of
the claim? - CORRECT ANSWERS Premium
Which of the following is not a class of insurance? - CORRECT ANSWERS Casualty
A hazard is best defined as: - CORRECT ANSWERS anything that increases the chance of loss or
severity of loss due to a peril.
A hazard that deals with a persons mental attitude, behavior and habits is an example of: - CORRECT
ANSWERS Moral hazard
Restoring the insured back to the condition he or she was in before the loss occurred is known as: -
CORRECT ANSWERS Indemnification
Which of the following is defined as `an agreement between two or more parties enforceable by law?` -
CORRECT ANSWERS Contract
The uncertainty or chance of a loss occurring is known as: - CORRECT ANSWERS risk.
pure risk. - CORRECT ANSWERS
risk management. - CORRECT ANSWERS
risk. - CORRECT ANSWERS
speculative risk. - CORRECT ANSWERS
#13 - CORRECT ANSWERS
The degree of loss a person/organization faces from suits brought by a third party refers to: - CORRECT
ANSWERS Liability Loss Exposure
Human Personnel Loss Exposure - CORRECT ANSWERS
Liability Loss Exposure - CORRECT ANSWERS
,Loss Exposure - CORRECT ANSWERS
Property Exposure - CORRECT ANSWERS
#14 - CORRECT ANSWERS
The state of being subject to a loss is considered: - CORRECT ANSWERS exposure
risk - CORRECT ANSWERS
hazard - CORRECT ANSWERS
exposure - CORRECT ANSWERS
insurance - CORRECT ANSWERS
#15 - CORRECT ANSWERS
Substitution of a small certain loss for a large uncertain loss is: - CORRECT ANSWERS insurance
insurance - CORRECT ANSWERS
a pure risk - CORRECT ANSWERS
an insurable event - CORRECT ANSWERS
law of large numbers - CORRECT ANSWERS
#16 - CORRECT ANSWERS
Which of the following elements of a contract is/are the binding force? - CORRECT ANSWERS
Consideration
Insurance is a contract whereby one undertakes to indemnify another against: - CORRECT ANSWERS
Damage
Loss control refers to: - CORRECT ANSWERS taking the necessary precautions that will reduce
the risk of a loss.
The term loss exposure refers to: - CORRECT ANSWERS the possibility of a loss.
When an insured rejects uninsured motorist in writing this is considered: - CORRECT ANSWERS
a waiver
Which of the following is NOT a known private insurer? - CORRECT ANSWERS Bond Insurance
Companies
, Which of the following is NOT required for a risk to be ideally insurable? - CORRECT ANSWERS
...The loss must occur on the insured`s property.
Which of the following statements is true about reinsurance? - CORRECT ANSWERS
Reinsurance is the process whereby the insurer transfers all or part of the risk to another company.
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 ANSWERS the more insurable it becomes.
Type of loss exposure pertaining to land and structures attached to it is: - CORRECT ANSWERS
property loss exposure
Materiality is determined by the disadvantage placed on the other party and: - CORRECT ANSWERS
both are correct. the influence of the facts and not by the event
The law of large numbers is a principal that basically says: - CORRECT ANSWERS the larger the
amount of information gathered, the more reliable that information will be.
the more insurance you have, the more protected you are. - CORRECT ANSWERS
the larger the amount of information gathered, the more reliable that information will be. - CORRECT
ANSWERS
the larger the possibility of a loss, the greater the exposure. - CORRECT ANSWERS
the larger the number of people in an insurance company, the more stable it is. - CORRECT ANSWERS
#28 - CORRECT ANSWERS
Performance depends upon an uncertain future event is the feature: - CORRECT ANSWERS
aleatory
conditional - CORRECT ANSWERS
adhesion - CORRECT ANSWERS
aleatory - CORRECT ANSWERS
unilateral - CORRECT ANSWERS
#29 - CORRECT ANSWERS
Which of the following is an example of an adverse underwriting decision? - CORRECT ANSWERS
All of these are examples, Issuing with limitations, Rejecting the risk, charging a higher rate
All of these are examples - CORRECT ANSWERS
(Latest ) Tested Questions with
Revised Answers, (A+ Guarantee)
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 ANSWERS Adverse Selection
According to the California insurance law, either party may rescind a contract for any of the following
reasons EXCEPT: - CORRECT ANSWERS
One party intentionally omits information from the other party. - CORRECT ANSWERS
If a representation is false in a material point, whether affirmative or promissory, the injured party is
entitled to rescind the contract. - CORRECT ANSWERS
Once a contract is signed, it can never be rescinded. - CORRECT ANSWERS
One party intentionally or unintentionally hides material information. - CORRECT ANSWERS
#3 - CORRECT ANSWERS
Which of the following are the main types of risks? - CORRECT ANSWERS
Sharing and Transfer - CORRECT ANSWERS
Avoidance and Retention - CORRECT ANSWERS
Pure and Transfer - CORRECT ANSWERS
Speculative and pure - CORRECT ANSWERS
#4 - CORRECT ANSWERS
What are the two types of torts? - CORRECT ANSWERS
Intentional & Unintentional - CORRECT ANSWERS
Legal & Non-Legal - CORRECT ANSWERS
Pure & Speculative - CORRECT ANSWERS
Broad & Basic - CORRECT ANSWERS
#5 - CORRECT ANSWERS
,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 ANSWERS
Indemnity - CORRECT ANSWERS
Estoppel - CORRECT ANSWERS
Pro-rata - CORRECT ANSWERS
Waiver - CORRECT ANSWERS
#6 - CORRECT ANSWERS
Which of the following is the amount of money the insured pays before the insurer pays for the rest of
the claim? - CORRECT ANSWERS Premium
Which of the following is not a class of insurance? - CORRECT ANSWERS Casualty
A hazard is best defined as: - CORRECT ANSWERS anything that increases the chance of loss or
severity of loss due to a peril.
A hazard that deals with a persons mental attitude, behavior and habits is an example of: - CORRECT
ANSWERS Moral hazard
Restoring the insured back to the condition he or she was in before the loss occurred is known as: -
CORRECT ANSWERS Indemnification
Which of the following is defined as `an agreement between two or more parties enforceable by law?` -
CORRECT ANSWERS Contract
The uncertainty or chance of a loss occurring is known as: - CORRECT ANSWERS risk.
pure risk. - CORRECT ANSWERS
risk management. - CORRECT ANSWERS
risk. - CORRECT ANSWERS
speculative risk. - CORRECT ANSWERS
#13 - CORRECT ANSWERS
The degree of loss a person/organization faces from suits brought by a third party refers to: - CORRECT
ANSWERS Liability Loss Exposure
Human Personnel Loss Exposure - CORRECT ANSWERS
Liability Loss Exposure - CORRECT ANSWERS
,Loss Exposure - CORRECT ANSWERS
Property Exposure - CORRECT ANSWERS
#14 - CORRECT ANSWERS
The state of being subject to a loss is considered: - CORRECT ANSWERS exposure
risk - CORRECT ANSWERS
hazard - CORRECT ANSWERS
exposure - CORRECT ANSWERS
insurance - CORRECT ANSWERS
#15 - CORRECT ANSWERS
Substitution of a small certain loss for a large uncertain loss is: - CORRECT ANSWERS insurance
insurance - CORRECT ANSWERS
a pure risk - CORRECT ANSWERS
an insurable event - CORRECT ANSWERS
law of large numbers - CORRECT ANSWERS
#16 - CORRECT ANSWERS
Which of the following elements of a contract is/are the binding force? - CORRECT ANSWERS
Consideration
Insurance is a contract whereby one undertakes to indemnify another against: - CORRECT ANSWERS
Damage
Loss control refers to: - CORRECT ANSWERS taking the necessary precautions that will reduce
the risk of a loss.
The term loss exposure refers to: - CORRECT ANSWERS the possibility of a loss.
When an insured rejects uninsured motorist in writing this is considered: - CORRECT ANSWERS
a waiver
Which of the following is NOT a known private insurer? - CORRECT ANSWERS Bond Insurance
Companies
, Which of the following is NOT required for a risk to be ideally insurable? - CORRECT ANSWERS
...The loss must occur on the insured`s property.
Which of the following statements is true about reinsurance? - CORRECT ANSWERS
Reinsurance is the process whereby the insurer transfers all or part of the risk to another company.
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 ANSWERS the more insurable it becomes.
Type of loss exposure pertaining to land and structures attached to it is: - CORRECT ANSWERS
property loss exposure
Materiality is determined by the disadvantage placed on the other party and: - CORRECT ANSWERS
both are correct. the influence of the facts and not by the event
The law of large numbers is a principal that basically says: - CORRECT ANSWERS the larger the
amount of information gathered, the more reliable that information will be.
the more insurance you have, the more protected you are. - CORRECT ANSWERS
the larger the amount of information gathered, the more reliable that information will be. - CORRECT
ANSWERS
the larger the possibility of a loss, the greater the exposure. - CORRECT ANSWERS
the larger the number of people in an insurance company, the more stable it is. - CORRECT ANSWERS
#28 - CORRECT ANSWERS
Performance depends upon an uncertain future event is the feature: - CORRECT ANSWERS
aleatory
conditional - CORRECT ANSWERS
adhesion - CORRECT ANSWERS
aleatory - CORRECT ANSWERS
unilateral - CORRECT ANSWERS
#29 - CORRECT ANSWERS
Which of the following is an example of an adverse underwriting decision? - CORRECT ANSWERS
All of these are examples, Issuing with limitations, Rejecting the risk, charging a higher rate
All of these are examples - CORRECT ANSWERS
