Insurance Policies & Regulations Flashcards
7 cards from real CA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Insurance Policies & Regulations flashcards as text
Under a California workers' compensation policy, which schedule governs the classification of employees for premium calculation purposes?
Answer: California Workers' Compensation Insurance Rating Bureau (WCIRB) Uniform Statistical Reporting Plan
In California, the WCIRB administers the classification system and rating plans used for workers' compensation insurance premium calculation.
An insured intentionally sets fire to their own building to collect insurance proceeds. Which legal doctrine or statute most directly bars recovery in California?
Answer: California Insurance Code Section 533
California Insurance Code Section 533 bars coverage for losses caused by the insured's own willful acts, preventing recovery for intentional acts like arson.
What is 'subrogation' in the context of California insurance claims?
Answer: The insurer's right to step into the insured's shoes and recover from a responsible third party after paying a claim
Subrogation allows the insurer to recover from the negligent third party the amount it paid to the insured, preventing a double recovery by the insured.
A California personal auto policy includes uninsured motorist (UM) coverage. The insured is struck by a hit-and-run driver. For UM coverage to apply, what is typically required?
Answer: There must be physical contact between the vehicles OR corroborating evidence of the phantom vehicle
California requires either physical contact with the unidentified vehicle or independent corroborating evidence to prevent fraudulent hit-and-run claims.
Which of the following statements about California's 'anti-stacking' provisions for uninsured motorist coverage is correct?
Answer: California allows UM stacking unless the policy contains a valid anti-stacking provision with proper premium credit
California permits insurers to include anti-stacking provisions for UM coverage, but only if the insured received a premium reduction for the anti-stacking restriction.
Under a California commercial auto policy, what does 'Symbol 1' on the declarations page indicate?
Answer: Any auto used in connection with the named insured's business is covered
Symbol 1 — 'Any Auto' — provides the broadest commercial auto coverage, covering any vehicle used in connection with the insured's business regardless of ownership.
A California property policy pays a claim on an actual cash value (ACV) basis. The damaged roof was 10 years old with a 20-year expected life. Replacement cost is $10,000. What is the ACV payment (assuming straight-line depreciation)?
Answer: $5,000
With 10 of 20 years used (50% depreciation), ACV = $10,000 × 50% = $5,000, reflecting the remaining useful value at the time of loss.