Free practice exam · no signup needed

California Personal Lines Practice Exam

20 exam-style questions drawn from the same bank as our full California Personal Lines course (California Personal Lines Broker-Agent Exam Prep). Answer all 20, then grade yourself — most state exams require 70% to pass. Explanations for every question are part of the full course.

1. A client never submits a proof of loss for a covered fire despite the insurer's written request, and the insurer denies the claim for that breach. The mortgagee named on the declarations asks whether it can still be paid. Under the Mortgage Clause of the HO 00 03:
The mortgagee is paid the full Coverage A limit regardless of the loss, because the insured's breach forfeits the insured's share to the lenderThe mortgagee cannot be paid, because the mortgage clause gives the lender no rights that are independent of the insured's own claimThe mortgagee is paid only if the insured cures the breach by submitting a late proof of loss that the insurer agrees to acceptThe mortgagee's right survives the insured's neglect if the mortgagee submits its own proof of loss within 60 days after notice of the insured's failure
2. A windstorm uproots a mature ornamental tree in the yard of a DP 00 03 rental in Lodi. The tree falls into the open yard and damages nothing. The landlord claims the value of the tree under the trees, shrubs and other plants other coverage. What is the correct outcome?
The tree's value is not paid, because trees are never covered property under any dwelling formThe tree's value is paid, up to 5 percent of Coverage A, because windstorm is an open peril on the DP-3The tree's value is paid in full without a sublimit, because it is on the described locationThe tree's value is not paid, because windstorm is not among the perils listed for trees, shrubs and other plants
3. A consumer has a complaint about her HMO plan. Which agency is the primary regulator of HMO plans in California?
The Department of Managed Health CareThe Office of Administrative LawThe Insurance Information InstituteThe Department of Insurance, Fraud Division
4. Which statement about the fraud warning required by Cal. Ins. Code section 1871.2 is correct?
It warns that a false claim will be denied but carries no criminal consequence, and it applies only to auto theft claimsIt warns that the insurer may rescind for unintentional concealment, and it must appear only on claim formsIt warns that any misstatement on an application voids the policy from inception, and it applies to every contract including reinsuranceIt warns that knowingly presenting false information to obtain or amend coverage or to make a claim is a crime, and it does not apply to reinsurance contracts
5. A producer tells a policyholder her existing whole life policy is nearly worthless, misstating its benefits, so she will surrender it and buy a new one. Which part of Cal. Ins. Code section 790.03 does this violate?
Subdivision (c), boycott, coercion or intimidationSubdivision (h), unfair claims settlement practicesSubdivision (a), misrepresentation to induce a surrenderSubdivision (e), false entries in an insurer's books
6. An agency's ad says, "Our insurers are members of the California Insurance Guarantee Association, so you are protected if they fail." How is this treated under Cal. Ins. Code section 790.03?
Permitted, because CIGA membership is a true statement of factAn unfair practice, since advertising CIGA membership is barredPermitted, if the insurers are admitted for the class being soldAn unfair practice only if the insurers are actually nonadmitted
7. A Long Beach family pays a neighbor's teenager to babysit for four hours on two Saturdays each month. Under Cal. Lab. Code section 3352(a)(8), is the teenager an employee for workers' compensation purposes?
Not an employee, because minors can never be employees under the California Labor CodeAn employee, because Labor Code section 3351(d) covers anyone who cares for children in a residenceNot an employee, because the work was for fewer than 52 hours in the 90 calendar days before any injuryAn employee, because the family rather than an agency pays the teenager directly for the work
8. Under ISO HO 00 03 Coverage D, what does the additional living expense provision pay when a covered loss makes the residence premises unfit to live in?
Any necessary increase in living expenses so the household can maintain its normal standard of livingThe fair rental value of the residence premises, less any expenses that do not continueAll living expenses of the household for the period during which the home is being repairedA flat percentage of the Coverage A limit for each month the home remains unfit to live in
9. The Governor declares a state of emergency for a wildfire, and a Paradise homeowner's residential property premium comes due while her neighborhood is inside the affected area. Under Cal. Ins. Code section 2062, what must her insurer offer?
A 30-day grace period for payment of the premium, available for 30 days after the emergencyA 90-day grace period for payment of the premium, available for one year after the emergencyA waiver of the premium for the policy period in which the emergency was declaredA 60-day grace period for payment of the premium, available for 60 days after the emergency
10. A domestic mutual life insurer proposes to convert into a stock company. Under Cal. Ins. Code section 11536, which approvals are required?
Board majority, the Commissioner's written consent, and a member voteThe Commissioner's consent and approval by the LegislatureA member vote and a superior court order approving the planBoard majority and a vote of the company's shareholders only
11. Under Cal. Ins. Code section 12880, which of the following is included within "veterinary expenses"?
The cost of drugs prescribed by a veterinarianThe cost of pet food recommended by a breederThe cost of boarding the pet while the owner travelsThe cost of a wellness subscription for routine grooming
12. Under Cal. Ins. Code section 106, a policy that pays a monthly benefit while the insured is disabled by sickness belongs to which class of insurance?
Life insurance, because the benefit is paid on account of the insured's healthCredit insurance, because the benefit replaces income the insured would have earnedDisability insurance, which appertains to disablement from accidents and from sicknessLiability insurance, because the insurer becomes liable to pay a monthly benefit
13. A family loses everything in a declared-emergency wildfire. Their policy carries a $400,000 personal property limit. Under Cal. Ins. Code section 10103.7(b), what must the insurer offer without an itemized claim?
No less than four months of living expenses in place of any advance payment for the personal propertyNo less than 30 percent of the dwelling limit, with the balance available only after a complete inventoryNo less than 60 percent of the personal property limit, here $240,000, with an itemized claim for the balanceThe full $400,000 personal property limit on the insured's sworn statement that the home was fully furnished
14. A producer asks a life applicant whether, in the applicant's own opinion, his health is good, and the applicant declines to give an opinion. Under Cal. Ins. Code section 339, what is the effect?
The applicant has not concealed anything, because a party need not communicate his own judgment even upon inquiryThe applicant has concealed a material fact, because the question was asked directlyThe applicant has made a false representation, because silence in answer to a question is treated as a denialThe applicant has waived the right to coverage, because every question on an application must be answered
15. A lender holds a mortgage on a Chico home worth far more than the loan balance and wants to insure its interest. Under Cal. Ins. Code sections 281 and 284, what is the lender's insurable interest?
The unpaid loan balance, because the interest is measured by the extent the lender might be damnifiedThe purchase price the borrower paid, because that fixes the value of the lender's securityNone, because only the owner of property has an insurable interest in itThe full value of the home, because any relation to the property supports full coverage
16. Under the Property Removed additional coverage of the HO 00 03, property being removed from a premises endangered by a covered peril is insured:
Against the 16 named perils only, for no more than 30 daysAgainst direct loss from any cause, for no more than five days at each placeAgainst theft only, for no more than 60 days while in storageAgainst direct loss from any cause, for no more than 30 days while removed
17. An insurer can pay all of its liabilities and reinsure all of its outstanding risks, but what is left afterward is less than the paid-in capital the Code requires. It has never missed a payment. What is its status under Cal. Ins. Code section 985?
Solvent, because it meets all of its obligations when they come dueInsolvent, because the required capital must remain after liabilitiesSolvent until a court enters a liquidation order against the companyInsolvent only if it has also missed at least one claim payment
18. After a covered fire to a DP 00 02 dwelling in Fresno, the insurer pays actual cash value and writes that the insured must finish repairs within six months of that payment to collect the replacement cost balance. Under California law, what is the minimum time the insured must be allowed?
Six months, because the ISO form sets the period and California adopts the multistate form as writtenSixty days from the date the insurer receives the sworn proof of loss, the standard fire policy's loss payment periodTwenty-four months from the inception of the loss, the same period that applies to filing suit after a disasterTwelve months from the first actual cash value payment, or 36 months for a loss relating to a state of emergency
19. A burglar takes five rings from an HO 00 03 insured's home. The jewelry theft special limit in the form is a per-category amount. How does that limit apply to the five rings?
Once, as an aggregate cap for all five rings together, regardless of the number of items takenNot at all, because jewelry is excluded property under the form rather than sublimited propertyOnly to the most valuable ring; the remaining rings are paid in full under the Coverage C limitFive times, once for each ring, because each stolen item is treated as a separate loss
20. Under Cal. Ins. Code section 33, which description fits an insurance broker?
Transacts life, disability and health insurance for the applicant and never on behalf of the insurerTransacts insurance by and on behalf of an admitted insurer that has appointed the broker in writingTransacts insurance through the insurer's own employees by telephone, mail and the internetTransacts insurance for compensation on behalf of another person, with but not on behalf of an insurer

Want a different set? Refresh the page for 20 new questions — the full course has 500+, each with a complete explanation, plus full-length timed exam simulations and an AI tutor.