CPCL California Property and Casualty license exam - Set 4 - Part 1

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 1: Casualty, or liability, insurance differs from property insurance in that it pays which party?

The named insured

The injured third party

The insurer's reinsurer

The state regulator

Question 2: After paying its insured for a covered loss, an insurer pursues recovery from the negligent driver who caused it. This right is known as which of the following?

Indemnity

Contribution

Liberalization

Subrogation

Question 3: The Insurance Services Office supports insurers primarily by providing which of the following?

Loss cost data and standard forms

Final premium rates to charge

Insurance sold to the public

Claims adjusting services

Question 4: A workers' compensation insurer adjusts an employer's premium up or down based on the employer's own past loss experience. This approach is known as which of the following?

Judgment rating

Manual rating

Merit, or experience, rating

Flat rating

Question 5: An independent rating agency such as AM Best assigns a rating that primarily reflects which of the following about an insurer?

The fairness of its rates

Its ability to pay claims

The quality of its agents

Its advertising reach

Question 6: Under a liability policy, an occurrence is best defined as which of the following?

Any intentional act by the insured

A deliberate breach of contract

A scheduled business transaction

An accident causing unintended injury

Question 7: In a liability policy, personal injury coverage differs from bodily injury coverage in that personal injury addresses which of the following?

Non-physical harms like libel and slander

Damage to tangible property

Physical harm to the body

Medical bills of a guest

Question 8: Under a liability policy, the insurer's duty to defend the insured is generally described how compared with its duty to pay damages?

Narrower than the duty to pay

Identical to the duty to pay

Broader than the duty to pay

Owed only after a verdict

Question 9: Supplementary payments under a liability policy, such as defense costs and bail bonds, are generally paid in what manner?

Only by the insured

As part of the policy limit

Only after the limit is exhausted

In addition to the policy limit

Question 10: Following an accident, a liability policy requires the insured to refrain from doing which of the following?

Notifying the insurer of the claim

Voluntarily admitting liability or settling

Cooperating with the defense

Forwarding legal papers to the insurer

Question 11: An auto liability policy written with split limits expresses coverage as which of the following?

Three separate figures

One combined figure

A single aggregate figure

A percentage of the loss

Question 12: A combined single limit on a liability policy provides coverage in which of the following ways?

Separate caps for each injured person

No limit at all

One total limit for all losses

A limit only for property damage

Question 13: An aggregate limit on a liability policy represents which of the following?

The most paid for a single claimant

The deductible amount

A per-accident cap

The most paid for all losses

Question 14: A jury awards a plaintiff more than the insured's liability policy limit. Who is responsible for the amount above the limit?

The insurer must pay it all

The insured, personally

The reinsurer

The state guarantee fund

Question 15: Under a liability policy, the insurer's duty to defend the insured generally continues until which of the following occurs?

The policy limits are exhausted by payment

The first hearing concludes

The insured retains private counsel

The premium becomes fully earned

Question 16: Under homeowners Section II, the term insured location is broader than residence premises because it also includes which of the following?

Only the home in the declarations

Vacant farmland owned by the insured

A newly acquired residence and certain rentals

The insurer's claims office

Question 17: Under homeowners Section II, a full-time student living away at college remains an insured if a relative, formerly a household resident, and under what age?

Eighteen

Nineteen

Twenty-one

Twenty-four

Question 18: Coverage F, medical payments to others, under a homeowners policy does NOT pay the medical expenses of which of the following?

A regular resident of the household

An injured social guest

A delivery person hurt on the premises

A neighbor bitten by the insured's dog

Question 19: A schoolteacher wants liability coverage for claims arising from employment away from home. Which homeowners endorsement addresses this need?

The personal injury endorsement

The home day care endorsement

The business pursuits endorsement

The watercraft endorsement

Question 20: To add coverage for libel, slander, and invasion of privacy to a homeowners policy, an insured would purchase which endorsement?

The business pursuits endorsement

The personal injury endorsement

The watercraft endorsement

The home day care endorsement

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