CALIFORNIA PROPERTY AND CASUALTY EXAM QUESTIONS AND CORRECT ANSWERS (GRADE A+) LATEST UPDATED 2026/2027

CALIFORNIA PROPERTY AND CASUALTY
EXAM QUESTIONS AND CORRECT
ANSWERS (GRADE A+)
LATEST UPDATED 2026/2027
Theeprocessewhereebyeaemutuleinsurerebecomeseaestockecompanyeisecallede-eCORRECTeANSWER-
Demutalization



Theeprocessewherebyeaestockecompanyeaemutaleinsurereisecallede-eCORRECTeANSWER-Mutalization



Theeprovisioneineaepropertyepolicyewhichestatesethatetheeinsuredehasebeenepaideupetoetheireinsurableeinter
esteise-eCORRECTeANSWER-Valuationeclause



Theeparteofetheepolicyethatestatesetheeamouteofecoverageetheeinsuredepropertyepolicyeperiodeise-
eCORRECTeANSWER-Declaration




Parteofetheepolicyethateestablisheselimitseuponetheeinsurereandetheeinsuredewithetheeinsuanceepolicye-
eCORRECTeANSWER-Conditions




Whicheareetheecharactericseofenegligencee-eCORRECTeANSWER-Duty,breach,proximateecause,edamages



Whicheofetheefollowingeisenoteaefederaleprograme-eCORRECTeANSWER-Worker'ecompensation



Absoluteerisk(liability)eiseimposede-eCORRECTeANSWER-Whenethereeisenegligenceewhethereproveneorenot



XeiseineaneaccidentewitheY.eXesufferse$5000eofedamageebuteiteisedeterminedethateXeise60%eresponsibleeforeth
eeaccident.eHowemuchewouldeXereceiveeundereCONTRIBUTORYenegligenceerules?e-eCORRECTeANSWER-$0



whateisetheemainepurposeeofetortelawe-eCORRECTeANSWER-
toedetermineefinancialeresponsibilltyeforedamage

,whateofetheefollowingeisenoteconsideredeaneintentionaletort?e-eCORRECTeANSWER-Autoeaccident



Whicheofetheefollowingestatementseisetrueeregardingecompensatoryedamages?e-eCORRECTeANSWER-
Thereeiseusuallyenoedirectecorrelationebetweenetheeamounteofegeneraleandespecialedamageseawardedetoet
heevictim



Theeinsureredecidesenotetoerenewaneinsured'sepersonaleautoepolicy.eHowemuchenoticeemustetheeinsurerepr
ovideetoetheeinsurede-eCORRECTeANSWER-30edays



aneinsured'selossereserveeforeaeclaimeisaneestimateeofetheeamounteinsurerewillepayeforepresenteandefutureel
oss,ewhicheofetheefollowingeiseaneexampleeofelossepreventione-eCORRECTeANSWER-
aehomeowneredecidesenotetoeinstalleaepooleinetheebackyard



whicheofetheefollowingedescribesetheeacteofemakingeaefalseeentryeineanyebookestatementeofereporteofeanyei
nsurerewithetheeintentetoedeviceeanyeexaminerelawfullyeappointedetoeexamineetheeinsured'se-
eCORRECTeANSWER-aneunfairepractice




aepersonecanebaseehis/hereclaimeforeliabilityeonetheebasiseofealleofetheefollowingeEXCEPTe-
eCORRECTeANSWER-breacheofeliability




theeterme"assignment"refersetoe-eCORRECTeANSWER-
theetransfereofetheeinsured'seinteresteineaepolicyetoeanothereparty



theeterme"subrogation"erefersetoe-eCORRECTeANSWER-
theeinsured'serightetoerecoverepaymentefromeaeresponsiblee3rdeparty



insur'serightetoerecoveretheepaymenteofetheeclaimeafteretheyepaidetheeinsuredeforetheirepropertyelosseseaen
egligente3rdepartyeiseknoweas,e-eCORRECTeANSWER-subrogation



aneinsuranceedeductibleeise-eCORRECTeANSWER-
theeamounteofecoveredeexpenseethatetheeinsuredepaysebeforeetheeinsurerepays,

,alleofetheefollowingeareerequirementseforeaenoticeebyemailetoeaneinsuredebyeinsurereexcepte-
eCORRECTeANSWER-noticeemustebeesentewithereturnereceipterequired




whicheofetheefollowingeiseconsideredespecialedamagese-eCORRECTeANSWER-
Compensationeforetimeeawayefromework



Whicheadvisoryeorganization(s)edevelopeformseforetheestandardemarket?e-eCORRECTeANSWER-
InsuraneeserviceeofficeeandeAmericaneassociationeofeinsurances



Whicheofetheefollowingewouldebeeconsideredespecialedmamges?e-eCORRECTeANSWER-Lostewages



WhatedoetheeinitialseS.tA.R.Rereperesent?e-eCORRECTeANSWER-Methodseoferiskemamagement



Alleofetheefollowingewouldebeeconsideredebenfitseofeinsuranceeexcepte-eCORRECTeANSWER-
Retentioneofelossebyetheeinsured



Whategiveseaneinsuredepartyetheerightetoeseekecompensationeifeiteiseprovenethateanotherepersonewithenegli
genceecontributedetoetheeinjurye-eCORRECTeANSWER-Tortelaw



WhateofetheefollowingeiseNOTeoneetheethreeemainetypeseofeinsuranceelossese-eCORRECTeANSWER-
Financialeloss



Undereaespecialecauseeofelosseformeifeaelandslideeisecausedebyeaneunnaturalefloweofewateredueetoeimpropere
grading,etheelosseis,e-eCORRECTeANSWER-Excludedeunderetheeconcurrentecausation



Aneopeneperilepolicyeprotectseagaginstetheelossefrome-eCORRECTeANSWER-
Anyeperil,eotherethanethoseespecificallyeexcluded



Whatefactoresupportdetheeprincipleeofeindemnity?e-eCORRECTeANSWER-Insurableeinterest



Alleofetheefollowingeareecharacteristicseofeaneideallyeinsurableelosseexposure"except"e-eCORRECTeANSWER-
Lossesethateareecatastrophic

, Theeamountetoereplaceepropertyewithe"elikeepropertyeofetheesameequalityeandeconstruction"eisetheepropert
iese-eCORRECTeANSWER-Replacementevalue



Alleofetheefollowingeareeconsideredeintentionaletortse-eCORRECTeANSWER-except,eAssult



Whateisetheedifferenceebetweenepereaccidentelimiteineaesplitelimitepolicyeandesingleelimitse-
eCORRECTeANSWER-Thereeisenoedifference




Theeintentionalerelinquishmenteofeknownerighteise-eCORRECTeANSWER-Waivier



Whichetypeeofelosseiseaebusinesseretirementeoredisabilityeofekeyeemployee,eexposedetoedeatheretirementeor
edisabilityeofekeyeemployee,e-eCORRECTeANSWER-Personnelelosseexposure




Theeamountetoereplaceeaneinsured'sedamagedepropertye-eCORRECTeANSWER-
lessedepreciation,eiseknoweasethe,eActualecashevalue



Theecommercialepropertyeconditionseincludedeaeconditionecallede"eliberalization".eTheeeffecteofethisecondit
ioneise-eCORRECTeANSWER-
Toeautomaticallyeapplyebroaderecoverageetoetheecommercialepropertyecoverageeparteifeaepolicyeformerevisi
onewouldebroadenecoverageewithouteaneadditionepremium



Ineaecommercialelineseprogramepolicycommonepolicyeconditionedoenoteincludeewhicheofetheefollowingeasea
econdition?,e-eCORRECTeANSWER-Perilseinsured




Aepossibilityeofefinanciallyelosseresultingefrometheeownershipeofepropertyeiseknowease-eCORRECTeANSWER-
insurableeinterest



lauraeisedrivingehereownecareonebehalfeofehereemployerelaura'senegligenteoperationeofeherecareinjureseaeme
mbereofepublic.eTheeemployeremayebeeheldeliableebecauseeofewhateisecalled.,e-eCORRECTeANSWER-
Vicariouseliability