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Insurance Licensing

California Property and Casualty Insurance License Examination Practice Test

The California Property and Casualty Insurance License Examination practice page covers insurance concepts used to evaluate personal and business risks. The available questions address personal auto coverage, commercial liability, crime and transportation exposures, policy documents, underwriting disclosures, and the handling of possible claims. They also test recognition of when an exposure may require coverage beyond a standard policy.

Exam overview

Exam providerCalifornia Department of Insurance
Exam codeNot listed
CategoryInsurance Licensing

About the California Property and Casualty Insurance License Examination Exam

Property and casualty work requires matching an exposure to an appropriate policy while distinguishing first-party property protection from liability coverage for injury or damage to others. Applicants need to interpret declarations, limits, exclusions, and policy conditions; recognize when vehicle use for paid delivery may fall outside personal auto coverage; and identify options for addressing that gap. Business examples involve commercial general liability, employee-dishonesty protection, and goods in transit. Questions also address underwriting: how accurate application information supports risk selection and pricing, and what policy assignment means when ownership changes. Claim-related judgment includes promptly reporting a possible liability claim and preserving relevant information. These concepts connect contract language to practical decisions made when applying for coverage, reviewing a policy, or responding to a loss.

Sample Practice Questions

Review a selection from this exam's published US Practice Tests practice bank.

Question 1

Under a personal auto policy, what is the usual purpose of uninsured motorist coverage?

  1. ATo pay for damage to the insured’s car caused by hail
  2. BTo provide benefits for covered injury or damage when an at-fault driver lacks required insurance, subject to policy terms
  3. CTo pay the insured’s routine vehicle maintenance costs
  4. DTo reimburse a lender when the insured defaults on a car loan
Show answerCorrect answer: B

Uninsured motorist coverage is generally intended to address specified losses involving an at-fault driver who has no applicable liability insurance. The available benefits and covered losses depend on policy terms and applicable law.

Question 2

An insurer issues a policy after an application is accepted. What is the policy’s declarations page primarily used to show?

  1. AThe insured-specific information, such as named insureds, covered property, limits, and policy period
  2. BA complete history of every claim ever filed by the insured
  3. CThe insurer’s internal underwriting guidelines
  4. DA list of all laws governing insurance in the state
Show answerCorrect answer: A

The declarations page summarizes key information specific to the policy, including the insured, policy period, covered property or risks, and selected limits. It is read together with the rest of the policy.

Question 3

A business buys coverage for its legal responsibility for bodily injury or property damage to others arising from its operations. Which policy type is most directly designed for this exposure?

  1. ACommercial general liability
  2. BCommercial property
  3. CWorkers’ compensation
  4. DCommercial auto physical damage
Show answerCorrect answer: A

Commercial general liability insurance is commonly designed to address specified third-party bodily injury and property damage liability exposures, among other covered liability exposures. Commercial property addresses covered damage to insured property, workers’ compensation addresses covered employee work injuries, and auto physical damage covers insured vehicles against specified damage.

Question 4

A person uses a car to deliver food for a fee, but the personal auto policy excludes certain vehicle use for a delivery business. What is the most appropriate step to address the exposure?

  1. AAssume the personal policy covers every use of the car
  2. BAsk the insurer or agent about appropriate coverage for the delivery use before relying on the policy
  3. CIncrease the homeowner’s personal property limit
  4. DRemove all liability coverage from the auto policy
Show answerCorrect answer: B

Personal auto policies may restrict or exclude certain commercial or delivery uses. The driver should disclose the use and ask the insurer or agent about an appropriate policy or endorsement, rather than assume coverage applies.

Question 5

A policyholder learns that a covered storm damaged a neighboring property and may have resulted from the policyholder’s conduct. What should the policyholder generally do regarding a possible liability claim?

  1. AAdmit legal fault so the claimant can be paid sooner
  2. BMake a private settlement without consulting the insurer
  3. CNotify the insurer and cooperate with its handling of the claim
  4. DDestroy records that could be misunderstood
Show answerCorrect answer: C

Liability policies commonly require prompt notice of claims or incidents that may lead to claims and cooperation with the insurer. An insured should generally avoid admitting liability or settling without the insurer’s consent, as policy terms may restrict those actions.

Question 6

An insurer asks an applicant to disclose facts that could affect acceptance or pricing of a risk. Why is truthful disclosure important?

  1. AMaterial misrepresentation or concealment may affect coverage or the insurer’s remedies under applicable law
  2. BIt guarantees that every future loss will be paid
  3. CIt removes the need to read policy exclusions
  4. DIt automatically converts a policy into a surety bond
Show answerCorrect answer: A

Insurance applications rely on accurate material information to assess risk. Misrepresentation or concealment can have legal and contractual consequences, subject to applicable law and the circumstances.

Question 7

A business owner buys a policy covering money and securities lost through employee dishonesty. Which coverage is most directly relevant?

  1. AEmployee theft coverage
  2. BEarthquake coverage
  3. CPersonal injury protection
  4. DCommercial general liability medical payments
Show answerCorrect answer: A

Employee theft coverage is a crime insurance protection designed to address covered loss of money, securities, or other property caused by dishonest acts of employees, subject to its terms and conditions.

How to use this practice test

Access 50 free practice questions drawn from the available question bank. Each session presents up to 20 randomly selected questions and shows results afterward. Use a session to check how well you distinguish policy types, interpret basic contract documents, and match common personal or business exposures to relevant coverage; revisit missed concepts before another session.

Preparation tips

  • For each auto scenario, separate vehicle damage coverage from protection against an uninsured driver, and note when paid delivery may require different coverage.
  • Practice matching business exposures to commercial liability, employee-dishonesty, and goods-in-transit coverage rather than relying on broad labels such as “business insurance.”
  • Study the declarations page as a summary of key policy information, and distinguish it from the full wording that states exclusions, conditions, and coverage terms.
  • For underwriting questions, identify which applicant facts could affect acceptance or pricing and why complete, truthful disclosure matters.
  • For possible liability claims, focus on timely notice to the insurer and accurate documentation; distinguish reporting a claim from deciding who is legally responsible.
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