California Property and Causality Practice Exam A Level with Accurate Solution

California Property and Causality Practice Exam A Level with Accurate Solution When can a person who sells real property require the use of a specific insurance agent, broker or solicitor? 1. As a condition precent to the sale of such real property. 2. When a buyer's credit score is below the lender's threshold. 3. A buyer is always able to choose their own insurance representative. 4. When it is required by local municipal regulation. - A buyer is always able to choose their own insurance representative. Unless otherwise specified in the insurance contract, all of the following are TRUE regarding return of premium EXCEPT 1. the premium is forfeited if the policy is cancelled. 2. the premium is refunded if a policy is rescinded or rejected. 3. the whole premium is returned if the insurer has not been exposed to loss. 4. any cancellation fees must be disclosed in writing within 5 days of the request to cancel. - the premium is forfeited if the policy is cancelled. How may a license may be surrendered by the insuree, or terminated by the employer? 1. Phoning the insurance commissioner. 2. Faxing a copy of the license to the insurance commissioner. 3. Personally delivering the license to the insurance commissioner, or by written notice from the employer. 4. Presenting a petition to surrender the license to the insurance commissioner from either the insuree or the employer. - Correct answer: Personally delivering the license to the insurance commissioner, or by written notice from the employer. All of the following are to be specified in an insurance policy EXCEPT 1. the financial rating of the insured. 2. a statement of the expected premium. 3. the parties between whom the contract is made. 4. the period during which the insurance is to continue. - the financial rating of the insured. In the event of receiving notice of a claim or other claim communication, all of the following timelines are accurate EXCEPT 1. every licensee or claims agent shall transmit notice of the claim to the insurer in no more than 5 calendar days. 2. every licensee shall immediately, but in no more than 15 calendar days, furnish them a complete response. 3. every license or claims agent shall immediately transmit notice of claim to insurer. 4. every insurer shall within15 calendar days acknowledge receipt and provide to the claimant the necessary forms. - every licensee or claims agent shall transmit notice of the claim to the insurer in no more than 5 calendar days. What is the primary function of The California Automotive Assigned Risk Plan (CAARP)? 1. to serve as an insurer to provide automobile coverage for low income people 2. to monitor the rates of automobile insurers to make sure the prices remain competitive 3. to put people who have trouble obtaining insurance in touch with insurers who may be required by law to insure them 4. to provide training for agents, and to determine which agents and automobile insurers are able to place business through the program - to put people who have trouble obtaining insurance in touch with insurers who may be required by law to insure them Which of the following may be insured against? 1. Disability. 2. Accidental death. 3. Wagering losses. 4. Catastrophic losses. - Correct answer: Wagering losses. Which of the following is a VALID reason to deny coverage or charge a higher rate or premium? 1. ancestry. 2. race, color or religion. 3. driving history or motor vehicle record. 4. sexual orientation or gender expression. - driving history or motor vehicle record. All of the following are authorized activities for the Limited Lines Automobile Insurance Agent EXCEPT if the agent 1. provides all necessary disclosures. 2. charges and collects a broker's fee for service. 3. transacts insurance on behalf of the consumer. 4. sells automobile property and liability policies. - charges and collects a broker's fee for service. Where shall an express warranty be made? 1. in the policy itself 2. on a specimen copy in the contract 3. on an illustration provided to the policy owner 4. in a brochure of the policy that is described in detail - in the policy itself All of the following are requirements to offer earthquake insurance with residential property coverage EXCEPT 1. earthquake insurance is required to be offered with any new policy or renewal. 2. earthquake insurance may be provided through an affiliate or nonaffiliate insurer. 3. a separate policy to cover the earthquake is required, an endorsement is insufficient. 4. earthquake peril can either be offered alone, or offered in combination with other perils. - a separate policy to cover the earthquake is required, an endorsement is insufficient. Which circumstances in a pretext interview determine if the questions are permissible? 1. When an insured is questioned prior to the application to determine the best recommendations for coverage. 2. When an insured is consulted by a person who hides his true identity on purpose when fraud for a claim is suspected. 3. When questions are asked to help underwriting decide on coverage for the insured when health problems are suspected. 4. When questions are posed by a person who refuses to identify himself or his relation to the company prior to a policy being underwritten. - Correct answer: When an insured is consulted by a person who hides his true identity on purpose when fraud for a claim is suspected. An insurance agent is a person who transacts all of the following types of insurance EXCEPT 1. annuities. 2. homeowners. 3. auto insurance. 4. life insurance. - life insurance. Who is able to place business through the California Automobile Assessed Risk Program? 1. any agent licensed in property and casualty insurance 2. only insurers with operating headquarters based in California 3. only agent/brokers licensed in fire and casualty who have also been certified through CAARP. 4. any agent who has been licensed in the State of California for a minimum of 5 years and is certified by CAARP. - only agent/brokers licensed in fire and casualty who have also been certified through CAARP. How does an "admitted" person differ from an "nonadmitted" person, as it pertains to insurance? 1. An "admitted" person has admitted to a crime or fraud, while a "nonadmitted" person has not. 2. An "admitted" person has been granted admission to an insurance association, while a "nonadmitted" person has not been accepted. 3. An "admitted" person has been admitted to an accreditation program, while a "nonadmitted" person has yet to earn the credits. 4. An "admitted" person has the right to transact insurance business within the state, while a "nonadmitted" person is not entitled to this action. - An "admitted" person has the right to transact insurance business within the state, while a "nonadmitted" person is not entitled to this action. What document must be provided to the insured prior to any residential insurance policy being issued or renewed? 1. A cost analysis of the insurance industry. 2. A statement from the Better Business Bureau. 3. A copy of the California Residential Property disclosure statement. 4. At least three quotes by competitors for the same coverage offered by the insurer. - A copy of the California Residential Property disclosure statement. Which of the following provisions of free insurance offered as an incentive to purchase or rent property is TRUE? 1. It is permitted with no charge. 2. It requires a separate charge or fee. 3. If offered as a guarantee of the performance of goods, it is prohibited. 4. If issued by credit unions or with newspaper subscriptions, it is limited under Statute 777.2. - Correct answer: It requires a separate charge or fee. All of the following are permissible reasons for a consumer reporting agency to furnish motor vehicle, past claims, or credit reports EXCEPT 1. information for employment purposes. 2. a response to a court order or a subpoena issued by a Federal Grand Jury. 3. a request of a national news organization for an investigative story. 4. underwriting purposes to determine a consumer's eligibility for insurance. - a request of a national news organization for an investigative story. Which is TRUE regarding a "valued" policy? 1. A market value policy is an example of a valued policy. 2. A valued policy specifies the coverage amount of the policy. 3. A valued policy is the only type of policy that builds a cash value. 4.