2024 California Insurance Adjuster Exam Test Bank New Latest Version Updated 2023-2024, Exams of Nursing

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2024 California Insurance Adjuster Exam Test Bank

New Latest Version Updated 2023-2024 with 8 00+

Questions and 100% Correct Answers

Under a personal auto policy(PAP),how would the damage sustained to an insured vehicle as the result the insured smashing into a large fallen tree that had fallen several hours earlier as the result of a lightening striking is it covered? -------- Correct Answer --- ---- under the collision section of the policy All of the following are considered insureds under the PAP, except: -------- Correct Answer ------- Any person using an auto not owned by the insured An auto liability policy with split limits of 15/30/5 would pay what maximum amount in the event of a covered bodily injury loss to three people? -------- Correct Answer ------- $30k An auto liability policy with split limits of $10/$20/$5 would pay how much in the event of a $10k loss to the other person's damaged vehicle? -------- Correct Answer ------- $5k What kind of coverage would you recommend to one of your insured's who is single and does not own a car, but, she does , on occasion, drive cars that belong to her friends (both male and female). Additionally, she is planning a vacation to Florida and will be renting a car while there -------- Correct Answer ------- named non-owner coverage endorsement What would an insurer likey pay if the following were the details surrounding an accident for which the insured was at fault and had bodily injury policy limits of $25,000 per person and $50,000 per occurrence? Three people injured:#1-$11,00,#2-$26,000 and #3-$12,000 -------- Correct Answer ------- $48, Which of the following cities would fall within the policy territory limits of PAP issued by an insurer in the state of california? -------- Correct Answer ------- Vancouver,Canada You are the agent for an insured that carries both a homeowners policy and a personal auto policy(PAP) with you through the same insurance carrier. The insured is driving home,(in the auto you have insured),after purchasing a brand new big- screen TV,VCR, stereo, CD -------- Correct Answer ------- DVD player all in one unit. He collides with a parked car and destroys the new TV. How would this loss be covered?/ the homeowners policy-personal property coverage

What is the requirement and what is provided under the Mexico coverage endorsement to a PAP in California? -------- Correct Answer ------- provide liability coverage (excess) for any accident in Mexico with 25 miles of the us border Of the following choices, which is correct regarding why a motorcycle is not automatically covered under a personal auto policy? -------- Correct Answer ------- an unendorsed personally auto policy does not automatically cover two wheeled vehicles How would the damage resulting from hail be covered under a personal auto policy ------ -- Correct Answer ------- covered as other than collision loss An automobile insurance company is permitted to cancel a personal auto policy for which of the following reasons? -------- Correct Answer ------- the insured's drive license is suspended. This is the person that normally drives the vehicle Jackie's personal auto policy(which is unendorsed) would provide payment for which of the following? -------- Correct Answer ------- expense of repairing a neighbor's wall, surrounding a garden, that Jackie accidentally backed through All of the following are considered an uninsured motor vehicle according to policy definitions found in a personal auto policy, EXCEPT -------- Correct Answer ------- A vehicle that is self-insured because it is owned by a state agency Your insured has a personal auto policy that provides medical payment coverage $2000. Of the following statements, which is true regarding the amount payable under this section of the policy? -------- Correct Answer ------- the insured is car- pooling to work with her neighbor when they are in an accident. Both are injured and incur almost $3000 each in medical expenses. The insured and her neighbor would each be paid $2000 from the policy Your insured client has an auto policy with liability and collision coverage's. the insured experience an at fault accident the first time he uses the neighbor's truck which has liability coverage only. His PAP provides coverage and will pay for the entire loss since he was driving the truck -------- Correct Answer ------- this is how the insurer would handle this claim. "other-than collision" coverage of personal auto policy covers which of the following types of losses? -------- Correct Answer ------- the windshield of the vehicle is damaged while left overnight on a city street within 5 miles of the insured's residence Which of the following is not only reason that an insurer can cancel an automobile insurance policy? -------- Correct Answer ------- the driver's license of the individual who usually operated the vehicle that is insured by the policy and who is insured by the policy has had his licenses suspended

A personal auto policy will cover all the following types of losses, EXCEPT: -------- Correct Answer ------- a "palm- top" computer, personally owned by the insured, is stolen from the insured's car while it is parked in her driveway at home Calculate the amount the insurer would pay, under a PAP, for a loss in the following circumstances, with the following coverage limit: collision coverage--$500 deductible. Other- than collision-- $50 deductible; damage to the insured's vehicle-$1050 after insured misses a stop sign and hits another vehicle -------- Correct Answer ------- $ State of California DOI minimums for liability coverage are $15,000 /$30,000/$5,000. An insured has an accident out of state that has higher financial responsibility limits than California. Which of these is true?/ -------- Correct Answer ------- the policy automatically provides the higher necessary limits without an extra premium An individual is driving home from the store with a new 48- inch flat screen TV. An accident occurs and the TV is destroyed. The driver carries a homeowners policy (HO) as well as a personal auto policy (PAP). Will the damaged TV be covered? If yes, how? -------- Correct Answer ------- yes, under the personal property part of his HO policy Which of these is not included in definition of the "uninsured motor vehicle" in a personal auto policy? -------- Correct Answer ------- vehicles that are owned by an agency of the state that self-insures the vehicle Why is a newly acquired motorcycle not automatically covered under the tems and conditions of a persona auto policy? -------- Correct Answer ------- these types of vehicles( motorcycles, and other types of non-automobiles) are not covered under a personal auto policy that is unendorsed An insured's vehicle is stolen. Following this the insured rents a replacement vehicles for two months until her auto is repaired by the insurer. Will her personal auto policy pay for the cost of the rental, and if so how? -------- Correct Answer ------- the policy will pay all needed expense the insured incurs for the rental car to the stated limits found in the policy In addition to paying legal damages, but without deducting from the policy's limits, which of these would be covered in a personal auto policy? -------- Correct Answer ------- these are all covered in addition to the limits stated in the policy contract A personal auto policy contains the state required liability and medical payment coverage as well as "other-than- collision' coverage. How would a claim be paid if there were a loss after an insured is stolen and then wrecked -------- Correct Answer ------- the claim would be paid under "other-than-collison" coverage An unendorsed personal auto policy would cover which of the following under the liability coverage part? -------- Correct Answer ------- the repair expenses that are

needed to fix the damage to neighbor's fence that was the result the insured negligently driving through it while driving unsafely The best definition of the term "collision" as found in a personal auto policy is which of the following? -------- Correct Answer ------- hitting any other vehicle or object with the insured vehicle, or the upset of the insured vehicle What is the limit for sound reproducing equipment under the coverage endorsement for excess sound reproducing equipment, audio, visual and data electronic, tapes , record, disks and other media -------- Correct Answer ------- $ A PAP contains the following limitations; $30,000person and $50,000/accident for bodily injury. An accident occurs that injures three people resulting in a number of lawsuits. The outcome of lawsuits found the insured to be liable and responsible for the following damages: $10,000 for the first person; 13,000 for the second person and $35,000 for the third person; what will the policy pay? -------- Correct Answer ------- $50, Damage which is the result of a hailstorm, in which of the following ways under a personal auto policy? -------- Correct Answer ------- covered as an other-than- collision loss An endorsement and an extra premium would be required for which of the following liability losses under a personal auto policy? -------- Correct Answer ------- the insured regulary uses, at the permission of his employer, a company owned car and has an accident with the vehicle The limit of liability in a personal auto policy proving coverage for "damage to your automobile" is stated as " the lesser of the amount necessary to replace or repair the damaged property (vehicle) or the ________(fill in the blank from the choice below ------ -- Correct Answer ------- actual cash value of the damaged or stolen property There is exclusion in an automobile insurance issued by admitted insurer in California regarding coverage in Mexico, which can only be provided through an endorsement to PAP. Which is true regarding this endorsement? -------- Correct Answer ------- it is liability coverage, on an excess basis , provided for losses that occur in Mexico, within 25 miles of the California/Mexico international border Coverage under a comprehensive personal liability policy or a homeowners section 2 extends: -------- Correct Answer ------- to the premises described and to the personal activities of the insured's on or off of the premises Which property is excluded under an HO3 policy? -------- Correct Answer ------- guard dog Which is an additional coverage does a DP2 have compared to a DP1 -------- Correct Answer ------- additional living expense

Which of the following collapse losses would be covered under an HO3 -------- Correct Answer ------- Weight of contents Which of the following loss exposures is not covered by section 2 of Ron's homeowners policy? -------- Correct Answer ------- Ron's registered/ licensed personal auto while used on his own property which includes 10 acres of undeveloped land The ordinance or law limitation in a homeowner's policy may cause a gap in coverage in which of the following situations? -------- Correct Answer ------- The insured's home is damaged by fire and must be rebuilt to meet present building codes. The additional cost of complying with the codes is 50% What is one way in which the HO2, HO4, and HO6 are similar? -------- Correct Answer -- ----- perils insured against under coverage C The process where by a mutual insurer becomes a stock company is called -------- Correct Answer ------- Demutualization The process whereby a stock company a mutual insurer is called -------- Correct Answer ------- Mutualization The provision in a property policy which states that the insured has been paid up to their insurable interest is -------- Correct Answer ------- Valuation clause The part of the policy that states the amount of coverage the insured property policy period is -------- Correct Answer ------- Declaration Part of the policy that establishes limits upon the insurer and the insured with the insurance policy -------- Correct Answer ------- Conditions Which are the characteristics of negligence -------- Correct Answer ------- Duty, breach, proximate cause, damages Which of the following is not a federal program -------- Correct Answer ------- Worker' compensation Absolute risk(liability) is imposed -------- Correct Answer ------- When there is negligence whether proven or not X is in an accident with Y. X suffers $5000 of damage but it is determined that X is 60% responsible for the accident. How much would X receive under CONTRIBUTORY negligence rules? -------- Correct Answer ------- $ what is the main purpose of tort law -------- Correct Answer ------- to determine financial responsibility for damage

what of the following is not considered an intentional tort? -------- Correct Answer ------- Auto accident Which of the following statements is true regarding compensatory damages? -------- Correct Answer ------- There is usually no direct correlation between the amount of general and special damages awarded to the victim The insurer decides not to renew an insured's personal auto policy. How much notice must the insurer provide to the insured -------- Correct Answer ------- 30 days an insured's loss reserve for a claim is an estimate of the amount insurer will pay for present and future loss, which of the following is an example of loss prevention -------- Correct Answer ------- a homeowner decides not to install a pool in the backyard which of the following describes the act of making a false entry in any book statement of report of any insurer with the intent to device any examiner lawfully appointed to examine the insured's -------- Correct Answer ------- an unfair practice a person can base his/her claim for liability on the basis of all of the following EXCEPT - ------- Correct Answer ------- breach of liability the term "assignment" refers to -------- Correct Answer ------- the transfer of the insured's interest in a policy to another party the term "subrogation" refers to -------- Correct Answer ------- the insured's right to recover payment from a responsible 3rd party insurer's right to recover the payment of the claim after they paid the insured for their property losses a negligent 3rd party is know as, -------- Correct Answer ------- subrogation an insurance deductible is -------- Correct Answer ------- the amount of covered expense that the insured pays before the insurer pays, all of the following are requirements for a notice by mail to an insured by insurer except -------- Correct Answer ------- notice must be sent with return receipt required which of the following is considered special damages -------- Correct Answer ------- Compensation for time away from work Which advisory organization(s) develop forms for the standard market? -------- Correct Answer ------- Insurance service office and American association of insurances Which of the following would be considered special damages? -------- Correct Answer --- ---- Lost wages

What do the initials S.T.A.R.R represent? -------- Correct Answer ------- Methods of risk mamagement All of the following would be considered benefits of insurance except -------- Correct Answer ------- Retention of loss by the insured What gives an insured party the right to seek compensation if it is proven that another person with negligence contributed to the injury -------- Correct Answer ------- Tort law What of the following is NOT one the three main types of insurance losses -------- Correct Answer ------- Financial loss Under a special cause of loss form if a landslide is caused by an unnatural flow of water due to improper grading, the loss is, -------- Correct Answer ------- Excluded under the concurrent causation An open peril policy protects against the loss from -------- Correct Answer ------- Any peril, other than those specifically excluded What factor support the principle of indemnity? -------- Correct Answer ------- Insurable interest All of the following are characteristics of an ideally insurable loss exposure" except" ----- --- Correct Answer ------- Losses that are catastrophic The amount to replace property with " like property of the same quality and construction" is the properties -------- Correct Answer ------- Replacement value All of the following are considered intentional torts -------- Correct Answer ------- except, Assult What is the difference between per accident limit in a split limit policy and single limits -- ------ Correct Answer ------- There is no difference The intentional relinquishment of known right is -------- Correct Answer ------- Waivier Which type of loss is a business retirement or disability of key employee, exposed to death retirement or disability of key employee, -------- Correct Answer ------- Personnel loss exposure The amount to replace an insured's damaged property -------- Correct Answer ------- less depreciation, is know as the, Actual cash value The commercial property conditions included a condition called " liberalization". The effect of this condition is -------- Correct Answer ------- To automatically apply broader

coverage to the commercial property coverage part if a policy form revision would broaden coverage without an addition premium In a commercial lines program policy common policy condition do not include which of the following as a condition?, -------- Correct Answer ------- Perils insured A possibility of financially loss resulting from the ownership of property is know as -------- Correct Answer ------- insurable interest Laura is driving her own car on behalf of her employer Laura's negligent operation of her car injures a member of public. The employer may be held liable because of what is called., -------- Correct Answer ------- Vicarious liability Type of exposure can be best defined as a condition or situation where the exposure to financial loss is presented to a business owner by the injury -------- Correct Answer ------

• disability, death, sickness, of valuable employee, Personnel loss exposure Which of the following is also know as a human loss exposure -------- Correct Answer --- ---- Personal loss exposure Which of the following best characterize a speculative risk? -------- Correct Answer ------- A situation that offers the possibility for a loss or gain In the state of CA no rate will remain in effect if it is considered to be any of the following, EXCEPT -------- Correct Answer ------- Impartial What course of action does a party to a contract have if the other party is found to be breach of that contract -------- Correct Answer ------- Damage for breach, reasonable attorney fee and cost Which part of the insurance contract summarize the major promises of the insurer -------
• Correct Answer ------- Insuring agreement Under tort law a corporation can be subject to a claim for legal liability on the basis ------ -- Correct Answer ------- Absolute liability Risk management technique that eliminates a loss exposure and reduces the chance of loss to zero is -------- Correct Answer ------- Avoidance A situation is which there only the possibility of loss or no loss is considered a -------- Correct Answer ------- Pure risk A reduction in value of property that results immediately from damage to the property is know as -------- Correct Answer ------- Direct loss

Items that are paid on replacement cost is defined as the -------- Correct Answer ------- Amount to replace the damage property without a deduction for depreciation A wrongful act other than a crime or breach of contract is law -------- Correct Answer ----- -- Tort law The amount to replace property with like property of the same quality and construction is the -------- Correct Answer ------- Replacement cost Whatis the process whereby insurers decides which customers to insure and what coverage to offer -------- Correct Answer ------- Underwriting The amount paid for damaged property which is equal to the price for which it could have been sold is called -------- Correct Answer ------- Market value A policy may not be transferred to another without -------- Correct Answer ------- Written consent of the insured An insured's loss reserve for a claim is -------- Correct Answer ------- An estimate or the amount that the insurer will pay What is the type of loss exposure that would include land and property attached to it ---- ---- Correct Answer ------- Liability loss exposure What type of policy protect against loss from any peril except those that are specially excluded -------- Correct Answer ------- All-risk or open peril Who is considered the first party to an insurance contract -------- Correct Answer ------- The insured A written provision that modifies the provisions of the original contracts is know as -------

• Correct Answer ------- An endorsement In a commercial property the insurance claim is denied because of the insured action's. the mortgage holder will in most cases., -------- Correct Answer ------- Still have right to receive the full amount of the loss a payment Named insured on a commercial insurance policy is "Sam Stone and Dan Sullivan DBA S&S bar and grill" if the insurer cancels the policy, they are required to mail or deliver written notice to -------- Correct Answer ------- Only Sam Stone Which type of exposure can be best be defined as a condition or situation for any exposure or financial loss is presented to an individual or family by such cause as injury disability, death or sickness -------- Correct Answer ------- Personal loss exposure

What is the primary reason for co-insurance clauses in property polices -------- Correct Answer ------- to encourage insured's to purchase coverages near the value of the property the state laws that regulate insurer practice regarding underwriting sales, rate-making, and claims handling are called, -------- Correct Answer ------- market conduct regulation a common formula that is used to establish cash value is -------- Correct Answer ------- ACV=replacement cost minus depreciation The possibility of financial loss resulting from the ownership of property is know as -------

• Correct Answer ------- Insurable interest Which of the following types of loss would result in a claim for monetary damages due to injury to another or damage to another's property -------- Correct Answer ------- Liability loss Which of the following coverage's is a property insurance coverage. - ------- Correct Answer ------- Other collision exclusive agents -------- Correct Answer ------- generally represent only one insurer in an unendorsed claims-made general liability policy how long does an insured have to report a claim which occurred during the policy period -------- Correct Answer ------- 60 days To determine the fact actual cash value of commercial bulding for coinsurance purposes uses -------- Correct Answer ------- Fair market value What causes is commonly used to requires purchase insurance close to the value of the property -------- Correct Answer ------- Coinsurance clause A distinct feature of the alternative funding method know as self-funding is -------- Correct Answer ------- The benefits are tailored to the group Actual cash value is defined as the -------- Correct Answer ------- The amount to replace damage property minus depreciation Which of the following would be know as the process whereby an insurer determine appropriate changes for its policies -------- Correct Answer ------- Rate-making All of the following would be considered benefits of insurance EXCEPT -------- Correct Answer ------- Retention of the loss by the insured What is the formula for actual cash value (ACV) in determining loss values -------- Correct Answer ------- Replacement cost less depreciation

Which of the following would be classified as a property insurance coverage -------- Correct Answer ------- Other-than-collision coverage Which of the following is the reason that an insured should not be making any kind of profit as the result of an insurance claim/loss being paid but rather, the payment should restore the insured to the financial status that existed prior to the loss with no chance of any type of profit., -------- Correct Answer ------- Basic principle of insurance What is the effect of "concurrent causation" exclusion under the "cause of loss-broad form in a commercial property policy? -------- Correct Answer ------- If there is a loss resulting from two or more perils that occur at the same time to cause a loss then is no coverage is any of the perils are excluded What will the mortgage holder do in the event that an insurer does not pay claim as the result of the actions of the insured -------- Correct Answer ------- Receive full payment for the loss, if the required premium has been paid What exactly does a policy know as "open peril" protect against -------- Correct Answer - ------ Perils not specially named as exclusions in the policy What does a "pure risk" consist of? -------- Correct Answer ------- The chance of loss only The term "proximate clause " is best defined by which of the following? -------- Correct Answer ------- A negligent act that causes bodily injury or property damage that follows a sequence of uninterrupted, but related chains of events Why would an employer be held legally liable for the negligent operation by employee who is driving a vehicle on behalf of the employer and cause an injury to a pedestrian --- ----- Correct Answer ------- The principle of vicarious liability How would a "peril" best be defined? -------- Correct Answer ------- Reason for the loss event that leads up to loss Which of the following combinations of characteristics should be considered when making a an insurance recommendation to a propective insured that has just purchased a new office building? -------- Correct Answer ------- The structure that is exposed a loss, the perils that may occur, consequently causing a loss possible financial impact of loss What type of insurance company is owned by individuals that are stockholder in the company; and share in the profits of the company? -------- Correct Answer ------- Stock insurance companies

All of the following explain the characters that are unique to insurance contracts EXCEPT -------- Correct Answer ------- There is an equal exchange of amounts or values within the contract With regards to insurance applicability the word "risk" can be best defined as which of the following? -------- Correct Answer ------- The uncertainty associated with a loss occurring All of the following insurance company are private insurers; EXCEPT -------- Correct Answer ------- Fraternal insurance company What would be the reason(s) for $100 deductible versus a $1000 deductible -------- Correct Answer ------- Neither of these apply An induvial who loves next to nuclear power plant is exposed to which of the following types of hazard -------- Correct Answer ------- Physical Which of these is defined as "exclusive agent' -------- Correct Answer ------- Sells for one insurance company and only that company's products. The concept of "pure risk" involves the possibly of chance of which of the following? ----- --- Correct Answer ------- A loss only An employee is operating their own car for their employer. The individual injures a person in a area as result of negligent driving. The reason why the employer would be held liable is because of which of the following? -------- Correct Answer ------- Vicarious liability Which of the following coverages' does an open peril policy provide? -------- Correct Answer ------- Perils other than those specifically named as being excluded "risk" is one of the most important terms in the insurance industry. How is it defined ------ -- Correct Answer ------- the uncertainty of a loss what would be the result of a lower(250) deductible vs. the selection of a higher deductible ($1000) -------- Correct Answer ------- greater number of smaller claims sent to the insurer of the following which is true characteristic about insurance -------- Correct Answer ------- it is considered a method of transferring risk the amount paid for property damage which is equal to price for which it could have sold is -------- Correct Answer ------- market value

which of the following is the best definition of an insurer's loss reserve -------- Correct Answer ------- the approximate dollar amount of an insurer's liability of at least one (or more)open claims for any type of risk exposure to be considered an ideally insurable riskwhich of the following characteristics does not have to exist , there is very little -------- Correct Answer ------- if any chance a loss happening during the policy period during the application process for a personal auto policy. the applicant says that he has not had any tickets or accidents. The insurance company accepts the risk and issues the policy. Shortyly after. the insured's vehicle is stolen resulting in the insurer paying the loss and canceling the policy. This despite the fact that they found out that the insured had received several traffic tickets that he neglected to mention. What is the reason for the course of action of the insurer -------- Correct Answer ------- the traffic tickets that were not disclosed were not material. This is why the policy was not recinded and the claim was paid under California insurance code marketing department is responsible for all of the following; except -------- Correct Answer ------- bulk mailing A representation as to the past -------- Correct Answer ------- present or future is an ,verified promise When must insurance records for insurance agents and insurance broker be made available to the insurance commissioner? -------- Correct Answer ------- all times When may a representation be withdrawn? -------- Correct Answer ------- only before the insurance is in effect RW and associates is an agency which represents BLG insuaracne corporation. RW and associates may leave the name BLG insurance corporation in its advetertisments by clearly stating the relationship between the two business in any of the following ways ; EXCEPT -------- Correct Answer ------- RW And Associates underwriting for Blg insurance Corporation Which of the following describes an insurer who has enough financial resources only to provide for all its liabilities and for all reinsurance of all outstanding risk? -------- Correct Answer ------- insolvent Represention as to the future is considered which of the following -------- Correct Answer ------- promise An insurer that has a certificate of authority in California is -------- Correct Answer ------- amitted

The execution of a policy involes which of the following? -------- Correct Answer ------- signing a covering note The negotiation of a policy involes which of the following -------- Correct Answer ------- sending the propect an email suggesting that they buy a certain type of policy An applicant of insurance does not reveal information that the insurer would rely upon to issue the policy this is/an -------- Correct Answer ------- consealment The method that the California DOI uses to approve or disapprove rate filing for various types of insurance such as homeowners and automobile is know as? -------- Correct Answer ------- prior approval method An organization will cease too exsit as an entity eliglble to hold a liceense for all of the following reasons EXCEPT -------- Correct Answer ------- termination of key employee All of the following are areas that market regulation cover EXCEPT -------- Correct Answer ------- Employee training Which of the following statement is true regading insurer with admitted status in California? -------- Correct Answer ------- they may not use race color, religion, or national origin as condition to use higher rate All of the following are requirements for a notice by mail to an insured by an insurer EXCEPT -------- Correct Answer ------- notice must be sent with return receipt reuired What is one the main factors that the insuruce commissioner uses while detereming whether a rate excessive or unfairly discriminatory? -------- Correct Answer ------- wheter the rate mathematically reflects the insurance company's investment income An agent who divert/comingles premium dollars for the agents's own use is guilty of ----- --- Correct Answer ------- theft Every admitted insurer in the state of California is required to maintain a unit or division to investigate which of the following? -------- Correct Answer ------- possible fraudulent claims made by insured's What will happen when an agent's appointment to an insurance company is terminated and the agent has no other appointment with any other insurance company? -------- Correct Answer ------- The agent's permanent license becomes inactive The CA insurance code requires property insurance polices specify all of the following EXCEPT -------- Correct Answer ------- the insured address

What steps need to taken to terminate a licensee's license that is in the possession of an employer? -------- Correct Answer ------- the licensee needs to give written notice of intent to the insurance commissioner Under California insurance code a surplus lines broker -------- Correct Answer ------- transact business only with non admitted insurers What would the commissioner likely do if an agent induces a client to co sign a loan ----- --- Correct Answer ------- suspend the agent's license Section 770 of the insurance code is true regardging unfair or trade practice? -------- Correct Answer ------- an entity cannot demand the insurance be placed with a particurl agency Which of the following describes an insurer who has enough financial resources only to provide for all of its liability and for all reinsurance of all outstanding risk? -------- Correct Answer ------- insolvent In California. Excess and surplus lines coverage needs to be placed through -------- Correct Answer ------- a surplus lines broker What must a life agent travel agent, or fire and casualty insurance agent do in order to act as an agent of a particular insurer?, -------- Correct Answer ------- file a notice of appointment with the commissioner In the business of insurance. The act of concealment is defined by all of the following statement EXCEPT -------- Correct Answer ------- concealment does not occur if no inquiry is made Which of the following statements is NOT true? A fire and casualty agent -------- Correct Answer ------- does not have the authority to collect premiums from producing broker agents. Where would an insured that is in the business of importing exotic animals from Africa most likey go to obtain -------- Correct Answer ------- excess and surplus lines insurer What else must an applicant for a fire and causualty license. life agent license. Or personal lines agent license complete in addition to pre- classroom study? -------- Correct Answer ------- a 12 hour course on ethics and CA code Which rate approval filling system is used in California for most lines of insurance -------- Correct Answer ------- prior approval When is property and causulty agent required to in form an isured of any conditions which may be precedent to coverage regarding a personal auto policy? -------- Correct Answer ------- at time of application

The state law that regulates insurer practices regarding underwriting. Sales. rate- making and claims handling are called -------- Correct Answer ------- market conduct regulation The CA insurance code -------- Correct Answer ------- requires agents to keep records of any compensation they may have received for ther services involved with premium financing It is a violation of CA insurance code to act as a producer for a non- admitted carrier unless -------- Correct Answer ------- the producer is a surplus lines broker You meet with a small furniture manufactuer and make a property and liability insurance recommendation. You have insured many risk of this type in the past and have a good idea of what their needs may be. There are several popular ways of determining business loss exposure. Which of the following ways are the least professional and least likely to correctly identify the loss exposure? -------- Correct Answer ------- get a copy of all current polices and determine what coverages they have been carrying and how much they have been paying Where do most states require insurers to file policy forms? -------- Correct Answer ------- the insurance department What must an isurer do who accept from an agent who is not specifically appointed by the insurer and then issues a policy from that application -------- Correct Answer ------- forward to the commissioner a notice of appointment with 14 days of receipt of application. In the state of CA no rate will reamin in effect if it is considered to be any of the following except -------- Correct Answer ------- impartial What does it mean if an agent's license is inactive? -------- Correct Answer ------- the agent cannot transact any insurance business for valid, active license is required A representation in an insurance contract qualifies as which of the following? -------- Correct Answer ------- an implied warranty According to the CA insurance code a binder is deemed a valid insurance policy for the purpose of providing that the insurance coverage specified in the binder for each of the following types of insurance EXCEPT -------- Correct Answer ------- life insurance What is required of a broker- agent before appointing an insurance solicitior? -------- Correct Answer ------- must hold a permanent license Company that negotiates and binds ceding reinsurance on behalf of an insurer is considered -------- Correct Answer ------- managing general agent

Insurers may purchase reinsurance for a variety of reason which of the following is not a good example of the use of reinsurance? Insurer purchases reinsurance -------- Correct Answer ------- only on the below average business submitted to them keeping the good business for themselves Any person who makes a loan of money using real property as security -------- Correct Answer ------- Shall no make available the information contained in a borrower's fire or causulaty policy if the borrower has filed a statement with the lender that they do not want the lender to disclose this informqation. What must a licensee do in order to surrender for cancellation a license in their posseion? -------- Correct Answer ------- deliver the document itself to the commissioner If an insurer pays an insured $25000 in lost wages,$45,00o for physically visits and hospital cost and $15,000 for physical therapy treatments and later finds out that the claim was faudlent the insured may be fined as much as 000 in lost wages,$45,00o for physically visits and hospital cost and $15,000 for physical therapy treatments and later finds out that the claim was faudlent the insured may be fined as much as -------- Correct Answer ------- $ It is a violation of the CA insurance code to act as a producer for a non admitted carreier unless -------- Correct Answer ------- the producer is a surplus lines broker

• Which of the following insurance professionals would be employed to aid an insurance broker -------- Correct Answer ------- insurance solicitor
• All of the following are characteristic of ideally insurable loss exposure EXCEPT: -------
• Correct Answer ------- losses that are catastrophic
• The types of transactions and insurer that a surplus lines broker is involved with is/are -------- Correct Answer ------- non-admitted insurer, property and casualty insurances
• How is an admitted insurer defined according to California DOI? -------- Correct Answer ------- it transact insurance according to laws of the state of California
• All licensees must be appointed by the insurance companies they represent in order to sell the lines of insurance that a particular insurer may offer. Assuming that a licensed fire and casualty broker/agent has received the proper appointment -------- Correct Answer ------- what type or types of insurance, from the following list, may this individual sell, auto, property insurance
• The insurance code definition of "insurance broker" is -------- Correct Answer ------- someone paid to transact insurance on behalf of another person, but not on behalf of the insurer

• The continuing education requirements that a fire and casualty broker-agent must fulfill as required by the DOI are which of the following? -------- Correct Answer ------- 25 hour during each twelve month period for the first four years the licensee is licensed
• In the state of California how is a domestic insurer defined according to the California DOI code? -------- Correct Answer ------- organized, chartered, or incorporated under the law of state of California
• Which of the following is the only reason that an insurer can cancel an automobile insurance policy? -------- Correct Answer ------- the driver's license of the individual who usually operates the vehicle that is insured by the policy and who is insured by the policy has had license suspended temporarily
• Under which of the following circumstance can the insurance commissioner deny the application for an agents license without a hearing? -------- Correct Answer ------- the applicant has previously has a licenses application denied for cause within the past five years
• It can be very tempting for commission based insurance salespeople to perform unethical activities in order to make a sale. of the following which would not be a reason why and agent might be tempted to act unethically? -------- Correct Answer ------- maintaining the best interest of customers first and foremost
• It is vital that an insurance agent/broker fully assess analyze and review a particular risk in order to determine the proper insurance coverage needed. The least likely way to do this is to -------- Correct Answer ------- review all coverage in their current insurance contracts as well as the premiums paid
• If an insured signs a claim form a claim which is fraudulent the insured may be guilty of -------- Correct Answer ------- perjury
• Which of the following best defines a binder -------- Correct Answer ------- a contract of insurance that is temporary, only in writing, between the insured and the insurer
• A fire and casualty managing general agent can do all of the following EXCEPT -------- Correct Answer ------- none of these are excluded from the power and authority given to fire and casualty managing general agent
• An insurance company pays a loss and continues coverage under an auto policy under the following circumstances. An insured honestly thinking that he received his last traffic ticket more than 36 months ago. Applies for an auto policy stating that he has had not ticket or accidents in the past 36 months. Several days after the policy is issued the insured's car is stolen. While the claim is being processed the insurance company discovers that the insured had received his most recent traffic ticket for speeding 32 months ago. Why is the claim paid and the policy -------- Correct Answer ------- the concealed facts were not material, they would paid the claims anyways

• The process of underwing a disability income insurance policy includes analyzing the risk associated with certain act ivies. Hobbies and hazardous sports. Therefore how does the California insurance code define and classify and act of an applicant who doesn't mention when applying for this type of insurance his recent interest and participation in bungee jumping -------- Correct Answer ------- this is defined and classified as concealment
• With respect to premium finance compensation service which statement are /is true --- ----- Correct Answer ------- the DOI require agents and brokers to maintain records of the compensation they receive for providing premium financing service for 3 years
• How is an "insurance broker" defined according to the California insurance code? ------ -- Correct Answer ------- an individual who receives compensation for transacting insurance on behalf of another person, but not on behalf of an insurance company
• What type of insurance company has owners who are stockholder in company and who share in the profits of the company? -------- Correct Answer ------- stock insurance companies
• Entitles or organizations that provide coverage for medical expenses in California are subject to the jurisdiction of the state department of insurance (with several exceptions) unless these entities or organizations can demonstrate that during the course of providing these services -------- Correct Answer ------- they are subject to the, all of the above
• When does the authority to transact insurance that is granted to a licensee from an insurance company become effective -------- Correct Answer ------- when the insurance company representative signs the notice of appointment
• What is the minimum number of required continuing education hours that a fire and casualty broker-agent must meet? -------- Correct Answer ------- 25 hours each 12 month period following the date of the original license if license after 1/1/
• Which of the following statements is true regarding the material of representations and concealment? -------- Correct Answer ------- it is determine by the affect of the facts on each party to the contract in determining his or her estimate of the disadvantages of the contract
• All fire and casualty broker-agents must not only be licensed with the DOI but they must also be appointed with the insurance companies they will be representing. When does this authority resulting from the insurer appointment to transact insurance business become effective -------- Correct Answer ------- when the notice of appointment is signed by the insurer

• A licensed fire and casualty broker-agent when properly appointed may transact all of the following except -------- Correct Answer ------- health insurance
• The California insurance code contains requirements concerning the requirements for name approval for all insurance licensees. These requirements included which of the following? -------- Correct Answer ------- the professional designation "CPCU" is acceptable following the name of any fire and casualty underwriter
• The word"materiality" applies to the concept of concealment and representation. Which of these is true in this regard? -------- Correct Answer ------- the materiality of any information in this regard is determined by the influence of the fact on each party in determining their estimates of the disadvantages of the proposed contract
• Insure' especially those with higher premiums very often have the immediate funds to pay required premiums such as automobile liability insurance. In many cases insurers will provide premium financing. Which of the following statements is correct regarding this financing according to the requirements of the California insurance code? -------- Correct Answer ------- any agent that provides premium financing service is required to maintain all records regarding the financing if compensation is received for financing of the premium for three years after transaction.
• When does the license of a fire and casualty broker- agent become inactive? -------- Correct Answer ------- when the broker/agent has no appointment with any insurance company, but licensing renewal fee have paid and CE requirement have been met
• How do insurance regulators view a statement made by an agent to a prospective insured that the dividends of an insurance contract are guaranteed each year? -------- Correct Answer ------- this would be considered a misrepresentation
• For more serious offenses and conviction an application for a license can be denied without a hearing which of the following circumstances would allow for an application to be denied for an insurance license WITHOUT A HEARING -------- Correct Answer ------- the applicant for the insurance has had no previous license denied for cause with previous 5 years
• All of the following factors can be used according to the insurance code in California to determine auto insurance policy rates in addition to any other factors the insurance commissioner is allowed to adopt; and include by regulation -------- Correct Answer ------
• 1and 3 only The collision coverage of the personal auto policy does not cover the following loss situations; EXCEPT -------- Correct Answer ------- large limbs and branches of a tree that have fallen into the street as a result of a windstorm. The insured collides with them

To be covered for a hit and run accident under the uninsured motorist property damage coverage of a PAP, what is required to be provided to the insurer -------- Correct Answer ------- license number of hit and run vehicle Which of the following coverage's may you buy with a NAMED OPERATOR POLICY?(chose the most complete answer) -------- Correct Answer ------- liability, uninsured motorist, medical payments, collision and other than collision The PAP collision deductible is $1000 and other than collision deductible is $500. How much would the insurer pay for an accident involving the overturn of one vehicle resulting in $2000 of damage -------- Correct Answer ------- $1000 A is an accident with B. A suffer$10000 of damage but it is determined that A is 25% responsible for accident. how much would a receive under COMPARATIVE negligence rules -------- Correct Answer ------- $7500 Under California financial responsibility law the minimum financial responsibility for accidents that involve several people injured in one accident, is -------- Correct Answer -- ----- $30,000 When does a personal auto policy require the insured to notify the police? -------- Correct Answer ------- for hit and run and thefts When an automobile insurance policy is canceled at the request of the insured , and the insurance company keeps all earned premiums, in addition to an amount to an pay for overhead expense incurred by the insurer, it is referred to as what type of cancellation -- ------ Correct Answer ------- the short rate type of cancellation Which of the following coverage's may you buy with a named non-owner liability policy?(choose the most complete answer) -------- Correct Answer ------- liability and medical What coverage is available under the extended non-owned liability coverage? -------- Correct Answer ------- liability and medical payments What is the limit per day for a transportation expense in an unendorsed personal auto policy in the event of theft, after it is reported and automobile is not returned within 48 hours of theft -------- Correct Answer ------- $20 After a collision loss, the personal auto policy requires the insured to -------- Correct Answer ------- allow the company to inspect the damaged property before it is repaired An insured has a personal auto policy and did not pay the initial insurance premium when it due. The insurer cancels the policy for non- payment. How much days' notice must the insure give? -------- Correct Answer ------- 10 days

If an individual does not own an auto, nor have regular use of an auto, what endorsement to a personal auto policy could be used to properly protect that individual - ------- Correct Answer ------- named non-owned liability coverage What coverage is available under the miscellaneous type vehicle endorsement? -------- Correct Answer ------- all coverage under the personal auto policy If an insured purchased an all- terrain vehicle(ATV), what endorsement can be added to the personal auto policy to insure the vehicle? -------- Correct Answer ------- miscellaneous type vehicle endorsement Under an unendorsed personal auto policy, transportation expense coverage applies to -------- Correct Answer ------- theft only losses Under an unendorsed personal auto policy, what coverage is available for personal effects? -------- Correct Answer ------- none What is the minimum discount percentage for the "good driver" discount? -------- Correct Answer ------- 20% What is one of the principle rating factor under proposition 103 allowed for personal auto polices? -------- Correct Answer ------- safety driving record Which of the following is an insurer's option when making a settlement with the insured under a personal auto policy? -------- Correct Answer ------- return stolen property to the address shown in the policy The personal auto policy towing and labor endorsement pays for -------- Correct Answer ------- the cost of the labor only if the labor is performed at the place of disablement Which of the following losses would be covered under Dick's personal auto policy other than collision coverage? -------- Correct Answer ------- someone shoots Dick's car rear window while the car is parked on the street overnight If a motor home is scheduled on a miscellaneous type of vehicle endorsement, all of the following property covered, EXCEPT -------- Correct Answer ------- awnings Max's personal auto policy (PAP) has liability and collision coverage. His neighbor's car has liability coverage only. Max borrows his neighbor's car to go the store and has an accident that is his fault. He damages his neighbor's car another car. Max PAP provides -------- Correct Answer ------- liability coverage that is excess of his neighbor's liability coverage. His collision coverage also applies, but on primary basis A personal auto policy (PAP) insured's car was a total loss when the car was stolen and wrecked. The insured has the following coverage': liability, medical payments, and

"other than collision". Her PAP -------- Correct Answer ------- "other than collision" will pay for the loss The personal auto policy territory limits include -------- Correct Answer ------- Montreal, Canada A personal auto policy is written for Lisa providing liability coverage. Which of the following auto liability situations would not be covered unless Lisa has an endorsement attached and paid an additional premium -------- Correct Answer ------- Lisa destroys a mailbox while driving a (non-owned) company car furnished for Lisa's regular use Kim's car is insured with a personal auto policy. The coverage includes medical payments with $2000 limits, which of the following is true statement about the medical payment coverage for necessary medical expenses? -------- Correct Answer ------- Kim gives her neighbor ride to the store in the insured car. She has an auto accident in which they each incur over $2000 in medical expenses. The maximum that Kim's policy will pay is $2000 to her and $2000 to her neighbor The collision coverage of a the personal auto policy covers? -------- Correct Answer ------

• damage caused by the insured, driving into a fallen tree, that fell during a storm Which of the following losses is not covered by either the personal auto policy collision or other than collision coverage? -------- Correct Answer ------- David leaves his personal (non-business) laptop computer in his car overnight. Car is parked in the driveway outside of his home. Computer is stolen from his In reference to the coverage's provided in the basic form, the boat owners policy is similar to what other policy -------- Correct Answer ------- the personal auto policy If an insured rents an auto while on vacation, what coverage if any will be available for physical damage coverage under a personal auto policy -------- Correct Answer ------- the broadest coverage on any auto shown in the declarations What is the difference between per accident limit in a split limits policy and single limits - ------- Correct Answer ------- there is no difference If an insured with a personal auto policy has an accident in a state with personal injury protection, how does the policy respond? -------- Correct Answer ------- coverage automatically is broadened to provide PIP Which of the following is a true statement about CAARP -------- Correct Answer ------- the minimum liability for CAARP policies are 15000/30000/5000 Newly acquired motorcycle are not automatically covered under a personal auto policy (PAP) because: -------- Correct Answer ------- the unendorsed policy does not cover two wheeled vehicles

Under the liability portion of an unendorsed personal auto policy, what coverage is available if the named insured is operating a company car on a regular basis -------- Correct Answer ------- the policy exclude this usage All of the following are principal rating factors under proposition 103 for personal auto policies, EXCEPT -------- Correct Answer ------- number of listed drivers Steven's(unendorsed) personal auto liability coverage would pay for -------- Correct Answer ------- the cost of repairing the neighbor's fence that Steven damage due to the negligent operation of his car All of the following expenses are covered in addition to the limits of a liability under coverage a of a personal auto policy except -------- Correct Answer ------- pre judgment Jim, your unmarried homeowner's insured does not own his car. He is planning a vacation trip to Florida and will be renting a car. He also drives cars belonging to friends occasionally. To protect Jim in theses situation, you would recommend a personal auto policy with a -------- Correct Answer ------- named non-owner coverage endorsement The limited Mexico endorsement applies to trips to Mexico with duration of -------- Correct Answer ------- 10 days or less If an insured borrows a neighbor's vehicles to run a personal errand, how do the policies respond in the event of an auto accident? -------- Correct Answer ------- the neighbor's policy is primary and the driver's policy is excess Under a personal auto policy. If a newly acquired auto is to replace the covered auto with liability coverage only, how long does the insured have to request collision coverage? -------- Correct Answer ------- 4 days Livery conveyance is best described as a -------- Correct Answer ------- vehicle for hire to transport people Damage done by an earthquake to an insured auto covered by the auto policy -------- Correct Answer ------- if the other than collision coverage is purchased If an insured timely requests coverage for a newly acquired auto under an existing personal auto policy, what coverage is provided before the request is made? -------- Correct Answer ------- broadest coverage for any vehicle shown on the declarations If an insured rents vehicle while on vacation in the U.S, what coverage is provided under the personal auto policy? -------- Correct Answer ------- all coverage is in force in the personal auto policy

A private passenger vehicle is added to an insurance policy. The CA insurance code ---- ---- Correct Answer ------- make no mention of vehicle inspection requirement If an insured under a personal auto policy leaves a covered auto dealer for repairs, and the auto is involved in an accident while being test driven by employee of the dealer, how will the personal auto policy respond to liability claims -------- Correct Answer ------- the personal auto policy is excess A single person does not own or lease an automobile. She occasionally drives her housemate's vehicle on an emergency basis. She is going on vacation and will have to rent a car. To obtain full automobile insurance coverage when this occurs, what should she purchase? -------- Correct Answer ------- the named non-owned coverage endorsement Under the liability portion of an unendorsed personal auto policy, what coverage is available if the named insured is operating a company car a regular basis? -------- Correct Answer ------- the policy excludes this usage Which of the following events within the last three years would disqualify an individual from receiving a good driver discount? -------- Correct Answer ------- .An at fault accident involving minor bodily injury What endorsement can be used to insure a motorcycle under a personal auto policy? --- ----- Correct Answer ------- miscellaneous type vehicle endorsement California has lower financial responsibility limits than most other states. If randy, a California personal auto policy insured, carrying minimum limits on coverage, has an accident in a state that quires higher limits then, -------- Correct Answer ------- the policy will automatically provide the higher limits at no extra charge Of the following loss scenarios, identify the one that is excluded from coverage under both the collision and other than collision coverage of an insured's PAP -------- Correct Answer ------- a "palm pilot' computer (owned by the insured) is stolen from the vehicle while parked in the insured's driveway. There are forcible signs of the vehicle Which of the following is not an uninsured motor vehicle as defined by personal auto polices uninsured motorist coverage? -------- Correct Answer ------- a vehicle owned by state agency which self-insures its auto Under a personal auto policy, who qualifies as an insured while using a covered auto --- ----- Correct Answer ------- any person Lee has a personal auto policy with $250 deductible collision coverage and $100 deductible other collision coverage. He runs a stop sign and hits another car. There is $1300 worth of damage to his(the insured's) car. How much would the insurer pay the damage to lee's car -------- Correct Answer ------- $1050