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CALIFORNIA PROPERTY AND CASUALTY EXAM
PRACTICE QUESTIONS AND ANSWERS 100%
PASS
What is the name of the insurance principle that refers to an insurer giving up its right to recover money or damages paid out to the insured from another party? A. Subrogation B. Subrogree Waiver C. Waiver of subrogation D. Subrogor - โโ - C. Waiver of subrogation Which portion of an insurance policy states that the insurance company will make payment in the event a covered loss occurs? A. Insuring agreement B. Declarations C. Exclusions D. Conditions E. Compensatory - โโ - A. Insuring agreement NRG Oil Company fails to repair its pipeline despite the development of large cracks and is found to have recklessly caused an oil spill. The government requests that the company be punished with a large damages award against it. What is the name of the type of damages that were requested? A. Punitive B. Compensatory C. General D. Special - โโ - A. Punitive
Kylie lives in a condominium. A storm causes the brick faรงade of the building to collapse. If Kylie has a Homeowners policy, which of the following would represent the amount of her policy benefit? A .Unlimited B. $50, C. $1, D. $100, E. No coverage - โโ - C. $ Which provision requires the policyholder to maintain a specific amount of insurance in order to obtain full payment for a loss? A. Cash B. Valuation C. Special D. Coinsurance - โโ - D. Coinsurance A group of businesses with similar exposures that get grouped together for rating purposes is a(n): A. Association B. Grouping class C. Classification D. Class - โโ - D. Class What must an insurance company provide an applicant if it orders an investigative credit report? A. It has no obligation to the applicant B. Send the applicant an initial written notice within 3 days C. Send the applicant an initial written notice within 5 business days D. A notice only if the insurance company uses the information to deny an application - โโ - B. Send the applicant an initial written notice within 3 days
The theft of property accompanied by the use or threat of physical force is called ________________. A. Robbery B. Shoplifting C .Conversion D. Burglary - โโ - A. Robbery The likelihood or chance of injury, damage or loss to a person or thing is called ______________. A. Hazard B. Peril C. Risk D. Ultimate loss - โโ - C. Risk What does the agent apply to an insurance policy in order to validate it? A. Countersignature B. Stamp of approval C .Company seal D. Notary stamp - โโ - A. Countersignature Sharpie rents out his home to a tenant, pursuant to a 2 year lease. An electrical fire occurs due to faulty wiring. What coverage type would allow a payout to Sharpie? A. Schedule D B. It is not covered C. Schedule B D. Schedule A E. Schedule C - โโ - A. Schedule D Which term refers to the agent's requirement of reviewing and signing new insurance policies? A. Authentisign
B. Countersigning C. Subrogation D. DocuSign - โโ - B. Countersigning A dwelling policy does not cover: A. Dwellings with four families or less B. Vacant dwellings C. Mobile homes situated on cinder blocks D. Dwellings with four families or less E. None of the above - โโ - C. Mobile homes situated on cinder blocks Fran's Furniture shop, an insurance client of your agency, often runs ads attacking her competitor, Frank's Furniture. Frank's Furniture claims that Fran's Furniture's catalog falsely claims that Frank's products are cheaply made with sawdust and are worthless, which causes a loss of business for Frank's Furniture. If Frank's Furniture sues Fran's Furniture, which coverage will protect Fran's Furniture? A. Advertising liability B. Professional liability C. Copyright coverage D. Business liability - โโ - A. Advertising liability Which of these statements concerning the CPP are correct? A. Almost all commercial risks are eligible for coverage under the CPP. B.The insured can choose a variety of eligible commercial coverages to tailor the package to fit his or her specific business insurance needs. C. A complete CPP includes Common Policy Declarations, Common Policy Conditions, and two or more coverage parts. D. A CPP can include Ocean Marine and Aviation insurance. - โโ - A. Almost all commercial risks are eligible for coverage under the CPP. B.The insured can choose a variety of eligible commercial coverages to tailor the package to fit his or her specific business insurance needs.
Which of the following losses are excluded under most Yacht policies? A. Injury suffered by a passenger in a waterskiing accident B. Collision damage to another boat for which the insured is liable C. Both A and B D. Neither A nor B - โโ - A. Injury suffered by a passenger in a waterskiing accident Which of the following are contained in the Common Policy Declarations? A. The policy period B. The name and mailing address of the insured C. Conditions specifying the insured's duties following a loss D. The insured's premium for each coverage part purchased - โโ - A. The policy period B. The name and mailing address of the insured D. The insured's premium for each coverage part purchased Who may cancel a CPP? A. Any named insured. B. The insurance company. C. The first named insured. D. None of the above; once a policy is issued, it can never be cancelled. - โโ - B. The insurance company. C. The first named insured. Under a CPP, how many days advance notice is required if the insurance company is cancelling the contract for nonpayment of premium? A. 10 days B. 21 days C. 30 days D. 60 days - โโ - A. 10 days Under a CPP, how long after the end of the policy period can the insurance company examine the insured's books and records?
A. 10 days B. 3 months C. 1 year D. 3 years - โโ - D. 3 years Under a CPP, when does the Inspections and Surveys condition give the insurance company the right to inspect the insured's premises? A. At any time B. Quarterly C. Every six months D. Once a year - โโ - A. At any time What is required for an insured's rights and duties under a CPP to be transferred while the insured is alive? A. The written consent of the insured B. The written consent of the insurance company C. verbal consent of the insured D. The written consent of the insured's legal representative - โโ - B. The written consent of the insurance company What is the largest office building risk that might be eligible for a BOP? A. Three stories and 50,000 square feet B. Three stories and 75,000 square feet .C Six stories and 75,000 square feet D. Six stories and 100,000 square feet - โโ - D. Six stories and 100,000 square feet In addition to maximum floor space, the BOP eligibility rules limit eligible risks to what maximum? A. $5 million in annual sales B. $3 million in annual sales C. $1.5 million in annual sales
A. Restroom fixtures B. Photocopy machines C. Furnishings in the insured's private office D. Carpets and floor tiles - โโ - A. Restroom fixtures D. Carpets and floor tiles Which of the following would be covered under the business personal property coverage of a BOP? A. Desks, filing cabinets, and other office equipment the insured uses in her business B. An enclosure around the front entry to a store that the insured tenant had built when he began leasing the building C. Cans of paint that are stacked near a newly constructed outer wall prior to painting the wall D. Fire extinguishers located at various places on the inside walls of the building - โโ - A. Desks, filing cabinets, and other office equipment the insured uses in her business B. An enclosure around the front entry to a store that the insured tenant had built Which of the following losses would be covered under the property coverage of a BOP? A. An insured moved inventory to another location to protect it from a tornado. Two days later, a sewer backup in the new location damaged that property. B. An explosion at the insured's business spewed toxic chemicals onto property belonging to another company. That company's owner sues the insured for the costs to clean up the chemicals. C. When a tornado damaged a nearby business, authorities closed off the area for one week to clean up the damage. The insured lost business income during that period. D. Because of negligence of an employee, an explosion on the insured's premises damages a nearby building. - โโ - A. An insured moved inventory to another location to protect it from a tornado. Two days later, a sewer backup in the new location damaged that property. C. When a tornado damaged a nearby business, authorities closed off the area for one week to clean up the damage. The insured lost business income during that period.
Which of the following is not excluded under Businessowners Liability coverage? A. Damages the insured causes intentionally B. Liquor liability for those in the business of serving liquor C. Liability assumed under an insured contract D. Damage to the insured's own work - โโ - C. Liability assumed under an insured contract What is the time limit for Extended Business Income coverage under the BOP? A. 30 days B. 45 days C. 60 days D. 90 days - โโ - A. 30 days For how long after the date of a direct physical loss will the insurance company pay for extra expenses under the extra expense additional coverage? A. 30 days B. 90 days C. 180 days D. 12 months - โโ - D. 12 months Unless a higher limit is shown in the declarations, what is the limit on coverage for business income from dependent properties? A. $5, B. $10, C .$50, D. $100,000 - โโ - $5, What is the discovery period for coverage of losses under the employee dishonesty optional coverage? A. One year from the date of the dishonest act
D. All of the above - โโ - D. All of the above Which Commercial Property Causes of Loss forms cover collapse? A. Basic B .Broad C. Special D. All of the above - โโ - B .Broad C. Special Which of the following would be covered under the building coverage of the Building and Personal Property coverage form? A. Inventory stored at the insured's warehouse B. An addition to the insured's store on which construction has just begun C .Fire extinguishers located in the insured's factory D. Office furniture and supplies kept in the insured's building. - โโ - B. An addition to the insured's store on which construction has just begun C .Fire extinguishers located in the insured's factory The insured's business sustains $25,000 damage in a fire. The fire department that was called to the scene billed the insured $1,000. The business is insured under the Building and Personal Property coverage form for $500,000 with a $5,000 deductible. How much will the insurance company pay for this loss? A. $21, B .$20, C .$24, D. $26,000 - โโ - A. $21, Which of the following properties would not be excluded under the Building and Personal Property coverage form? A. Lawn B .Driveway
C .Private company jet D .Animals held for sale - โโ - D .Animals held for sale When are losses under the Building and Personal Property coverage form paid at replacement or repair cost? A. Always B .Never C. If the insured meets the coinsurance requirements and costs are $2,500 or less D .Whenever the total amount of loss does not exceed 25% of the policy limit - โโ - C. If the insured meets the coinsurance requirements and costs are $2,500 or less Which of the following have special loss valuation requirements under the Building and Personal Property coverage form? A. Buildings B .Furniture and fixtures C .Glass D. Valuable papers and records - โโ - C .Glass D. Valuable papers and records Which of the following losses would be excluded under the Building and Personal Property coverage form if the insured building had been vacant for more than 60 days before the loss occurred? A. Attempted theft B. Prinkler leakage when the insured had protected the system against freezing C. Vandalism D. Glass breakage - โโ - A. Attempted theft C. Vandalism D. Glass breakage Which of the following is covered under the Builders Risk coverage form? A. Building under construction
D. General average - โโ - Jettison The Motor Truck Cargo policy does which of the following? A. Insures a truck carrier for liability arising out of the transportation of cargo B. Covers any loss to cargo in transit, regardless of whether the carrier is liable for damage C. Insures the shipper for all incoming or outgoing shipments during the policy term D. Provides coverage for a shipper on a single shipment of goods - โโ - A. Insures a truck carrier for liability arising out of the transportation of cargo If the insurance company requests a proof of loss on a Commercial Inland Marine claim, the insured must submit it within how many days? A. 10 days B. 30 days C .60 days D. 90 days - โโ - C. 60 days Which of these statements about the Mail coverage form are correct? Select all that apply. A.It covers bonds, securities, and checks when they are sent by first class or certified mail. B. Food stamps and money are always excluded under the policy. C. Property is covered on a named peril basis. D. Losses are valued on the basis of the property's actual value, but not less than its market value, on the date of mailing. - โโ - A. It covers bonds, securities, and checks when they are sent by first class or certified mail. D. Losses are valued on the basis of the property's actual value, but not less than its market value, on the date of mailing. Which of the following can be covered under the Physicians and Surgeons Equipment coverage form? Select all that apply.
A. Medical instruments that are on the premises B. Dental instruments that are off the premises C. Radium D. All of the above - โโ - A. Medical instruments that are on the premises B. Dental instruments that are off the premises Which of the following losses could be covered under the Theatrical Property coverage form? A.Theft of costumes from an unlocked vehicle B.Damage to a vehicle used as a prop in the production C.Destruction of admission tickets for the production in a fire D/All of the above - โโ - B.Damage to a vehicle used as a prop in the production Which of the following properties can be covered under the Film coverage form? Select all that apply. Positive prints Motion picture film Soundtrack Unused footage - โโ - Which of the following properties can be covered under the Film coverage form? Select all that apply. A. Positive prints B.Motion picture film C.Soundtrack D.Unused footage - โโ - B.Motion picture film C.Soundtrack Which of these losses is covered under the Signs coverage form? Select all that apply. A.The electric sign above the insured's business is destroyed when it is blown down in a thunderstorm.
The Electronic Data Processing Equipment floater covers what? Select all that apply. A.Computer hardware, but not software or data. B.Property in transit. C.It does not cover computer equipment that is in the insured's care, custody, or control. D.It can contain breakdown coverage - โโ - B.Property in transit D.It can contain breakdown coverage Which of the following are true about the 60-day basic extended reporting period? Select all that apply. A.It becomes effective automatically if needed when a claims-made policy expires. B.The insured must request it in writing within 60 days after the policy expires. C.It does not require an additional premium. D.No separate endorsement is required to provide this extended reporting period. - โโ
- A.It becomes effective automatically if needed when a claims-made policy expires. C.It does not require an additional premium. D.No separate endorsement is required to provide this extended reporting period. What is the purpose of a retroactive date in the claims-made form? A.Extends the period of time in which a claim can be covered under the policy B.Stipulates a date as the first date on which an event can occur and be covered by the policy if a claim is filed C.Extends the policy period D.Stipulates a date after which any loss that occurs will not be covered - โโ - B.Stipulates a date as the first date on which an event can occur and be Which of the following is a personal and advertising injury? A.Broken leg B.Death C.Calling a client a cheat and a fraud D.Dog bite - โโ - C.Calling a client a cheat and a fraud
Which of the following are usually excluded under Coverage A of the Commercial General Liability policy? Select all that apply. A.Property damage to property owned by the insured B.Property damage to property in the care, custody, or control of the insured C.Bodily injury sustained by an insured while using the insured's product D.Bodily injury to a customer who is injured in an accident on the insured's premises - โโ - A.Property damage to property owned by the insured B.Property damage to property in the care, custody, or control of the insured All of the following reduce the CGL's General Aggregate Limit except which of the following? A.Medical Payments sublimit B.Personal and Advertising Injury limit C.Fire Damage limit D.Products-Completed Operations limit - โโ - .Products-Completed Operations limit A woman is injured when she breaks a tooth on a rock that mysteriously found its way into a box of cereal. This is an example of which of the following? A.Premises and operations exposure B.Products-completed operations exposure C.Contingent liability exposure D.Contractual liability exposure - โโ - B.Products-completed operations exposure Which of the following business liability exposures are either excluded altogether from the CGL or covered only in certain circumstances? Select all that apply. A.Premises and operations B.Indirect/contingent liability C.Pollution D.Work-related injuries to employees - โโ - C.Pollution D.Work-related injuries to employees
