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Exam Review

Key Facts: CA Property & Casualty Exam

60%

Passing Score

CDI requirement

12 hrs

Pre-License Education

Ins. Code 1749 (AB 943, 2026)

30/60/15

Auto Minimums

Vehicle Code 16056 (SB 1107)

$500K

CIGA Claim Limit

Per claim

$55

CDI Exam Fee

CDI fee schedule (+$43 PSI fee)

California's P&C exam requires 60% to pass, with 150 questions in 3 hours. Since January 1, 2026, California requires only the 12-hour Code and Ethics pre-license course. Key unique topics include Proposition 103 (rate regulation), the California FAIR Plan, California Earthquake Authority (CEA), and Proposition 213 (uninsured motorist restrictions). The CA Insurance Guarantee Association (CIGA) provides $500,000 per claim coverage.

Sample CA Property & Casualty Practice Questions

Try these sample questions to review concepts for the CA Property & Casualty exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 486+ question experience with AI tutoring.

1Which state agency has primary regulatory authority over property and casualty insurance companies and producers in California?
A.California Department of Financial Protection and Innovation (DFPI)
B.California Department of Insurance (CDI)
C.California Bureau of Real Estate (CalBRE)
D.California Department of Consumer Affairs (DCA)
Explanation: The California Department of Insurance (CDI) is the primary regulator of all insurance companies and insurance producers in California, including property and casualty lines. The CDI is headed by the Insurance Commissioner, who is elected by California voters. The DFPI regulates financial services, CalBRE oversees real estate, and the DCA handles professional licensing in other fields.
2How is the California Insurance Commissioner selected?
A.Appointed by the Governor
B.Appointed by the state legislature
C.Elected by California voters in a statewide election
D.Appointed by the National Association of Insurance Commissioners (NAIC)
Explanation: The California Insurance Commissioner is elected by voters in a statewide election. This was established by Proposition 103 in 1988, which also introduced prior approval rate regulation for property and casualty insurance. The elected status makes the Commissioner directly accountable to California residents rather than political appointees.
3What key change did Proposition 103 (1988) bring to California property and casualty insurance regulation?
A.Eliminated all insurance regulation in California
B.Required prior approval of property and casualty insurance rates by the CDI
C.Created the California Earthquake Authority
D.Established the California FAIR Plan
Explanation: Proposition 103, passed by California voters in 1988, established prior approval rate regulation for property and casualty insurance. This means insurers must submit proposed rate changes to the CDI and receive approval before they can be implemented. It also made the Insurance Commissioner an elected position, required a 20% good driver discount for auto insurance, and rolled back rates by 20% initially. The CEA and FAIR Plan were established through separate legislation.
4Since January 1, 2026 (AB 943), how much prelicensing study must a California property and casualty applicant complete before CDI can issue the license?
A.12 hours of study on ethics and the California Insurance Code
B.40 hours
C.52 hours
D.60 hours
Explanation: AB 943 repealed the 20-hour prelicensing requirements on January 1, 2026. Insurance Code 1749 still requires 12 hours of study on ethics and the California Insurance Code before the license is issued; CDI says the course is not required to schedule or take the exam.
5In California, what is the distinction between an insurance agent and an insurance broker?
A.There is no distinction; the terms are interchangeable
B.An agent represents the insurer; a broker represents the insured
C.A broker represents the insurer; an agent represents the insured
D.Only brokers can sell property insurance; agents sell casualty insurance
Explanation: Under California Insurance Code, an insurance agent (also called a producer) represents the insurance company and has the authority to bind coverage on behalf of the insurer. An insurance broker, by contrast, represents the insured (the client) and shops among multiple insurers to find the best coverage. This distinction is important because it determines the fiduciary duties and legal obligations of each role.
6What is the continuing education (CE) requirement for California property and casualty insurance producers per renewal period?
A.20 hours every 2 years
B.24 hours every 2 years
C.30 hours every 2 years
D.36 hours every 2 years
Explanation: California requires property and casualty insurance producers to complete 24 hours of continuing education (CE) every 2-year license renewal period. Of the 24 hours, at least 3 hours must be in ethics. CE courses must be taken through CDI-approved providers. Failure to complete CE before the renewal date can result in license suspension or non-renewal.
7How many hours of ethics CE are required as part of California's 24-hour continuing education requirement for P&C producers?
A.2 hours
B.3 hours
C.4 hours
D.6 hours
Explanation: Of the 24 hours of continuing education required every 2 years, California mandates that at least 3 hours must be specifically in ethics. The remaining 21 hours can be in any approved insurance-related topics. The ethics requirement ensures producers maintain current knowledge of ethical standards, unfair practices laws, and professional conduct requirements under the California Insurance Code.
8Under California's prior approval system established by Proposition 103, what must a property and casualty insurer do before implementing a rate increase?
A.Notify the CDI within 30 days after implementing the rate change
B.Submit the proposed rate change to the CDI and receive approval before it takes effect
C.File the rate with NAIC and wait 60 days
D.Publish the proposed rate in a newspaper of general circulation
Explanation: Under Proposition 103's prior approval system, California property and casualty insurers must submit proposed rate changes to the CDI and receive explicit approval before those rates can take effect. This is different from 'file and use' states where rates can be implemented upon filing. Consumer groups and interested parties can intervene in the rate review process, making California one of the most regulated states for P&C insurance pricing.
9Under the California Insurance Code, a nonresident producer may be licensed in California if they meet which requirement?
A.They must first work under a California-licensed agent for one year
B.They must hold a valid license in their home state and apply through the CDI
C.They must establish a physical office in California
D.They must pass the California-specific insurance exam
Explanation: California follows the NAIC producer licensing model, which allows nonresident producers to obtain a California license if they hold a valid and active license in their home (resident) state. They must apply through the CDI and may be subject to background checks, but they do not need to complete California's pre-license education or take the California exam. The home state must have reciprocal licensing agreements.
10What authority does the California Insurance Commissioner have regarding an insurer's request to withdraw from the California market?
A.The Commissioner has no authority and the insurer can leave immediately
B.The Commissioner can require the insurer to continue writing policies for up to one year
C.The Commissioner can permanently prevent the insurer from leaving
D.The Commissioner can only ask the insurer to reconsider
Explanation: Under California Insurance Code Section 1071.5, the Insurance Commissioner has the authority to require an insurer that wants to withdraw from the California market to continue writing policies for up to one year. This prevents sudden market disruptions that could leave consumers without coverage. The insurer must provide adequate notice to the CDI, and the Commissioner can mandate a transition period to protect policyholders and ensure market stability.

About the CA Property & Casualty Exam

The California property and casualty insurance exam covers CDI licensing requirements, California Insurance Code, Proposition 103 rate regulation, FAIR Plan, California Earthquake Authority (CEA), auto insurance (including Proposition 213), commercial coverage, workers compensation, and California-specific consumer protections.

Exam sponsor: California Department of Insurance (CDI) / PSI. The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Questions

150 questions

Time Limit

3 hours

Passing Score

60%

Exam / Certification Fees

$55

Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

15%

Property exam: General Insurance

Insurance concepts and principles, contract law, the insurance marketplace, tort law (CDI 2025 Property objectives)

15%

Property exam: Property Insurance

Property basics, policies, classes of insurance

38%

Property exam: Personal Lines Insurance

Residential property, homeowners valuation, liability, FAIR Plan and CEA risk pools, fire mitigation, inland marine

30%

Property exam: Commercial Insurance Coverages

Commercial package policy, commercial property, businessowners policy

2%

Property exam: Pet Insurance

Definitions, pet insurance basics, disclosures, administrative proceedings

15%

Casualty exam: General Insurance

Insurance concepts and principles, contract law, the insurance marketplace, tort law (CDI 2025 Casualty objectives)

15%

Casualty exam: Casualty Insurance

Casualty basics, policies, classes of insurance

35%

Casualty exam: Personal Lines Insurance

Residence liability, inland marine, personal auto (30/60/15 minimums), umbrella and excess liability

35%

Casualty exam: Commercial Insurance Coverages

ISO commercial lines programs, commercial casualty, surety bonds

Preparing for the CA Property & Casualty Exam

What You Need to Know

  • Passing score: 60%
  • Exam length: 150 questions
  • Time limit: 3 hours
  • Exam / certification fees: $55 Official sources

Using Our Practice Resources

  • Work through all 486 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

CA Property & Casualty: Suggested Study Strategy

1Master Proposition 103 — rate regulation, good driver discounts, credit score prohibition
2Know CEA earthquake coverage: deductible tiers, coverage components, participation rules
3Understand CA FAIR Plan for high-risk properties including wildfire zones
4Learn the CA 30/60/15 auto minimums (SB 1107, since January 1, 2025) and Proposition 213 uninsured motorist rules
5Study CIGA guaranty association $500K per claim coverage limit

Frequently Asked Questions

How hard is the California property and casualty insurance exam?

The CA P&C exam has 150 questions in 3 hours and requires 60% to pass. It covers extensive California-specific topics including Proposition 103, CEA, FAIR Plan, and unique auto insurance provisions. Thorough preparation is essential.

What is Proposition 103 and how does it affect CA P&C insurance?

Proposition 103 (1988) requires prior approval of all property and casualty insurance rate changes in California. The CDI Insurance Commissioner must approve rate increases before they take effect. It also prohibits using credit scores for auto insurance rating and requires 'good driver' discounts of at least 20%.

What is the California Earthquake Authority (CEA)?

The CEA is a publicly managed, privately funded earthquake insurance authority. It offers residential earthquake coverage with deductibles typically of 5%, 10%, 15%, or 25%. Residential property insurers must offer earthquake coverage or participate in the CEA. Coverage includes dwelling, personal property, and loss of use.

What are California's minimum auto insurance requirements?

Since January 1, 2025 (SB 1107), California requires 30/60/15 minimum liability coverage ($30,000 per person/$60,000 per accident bodily injury, $15,000 property damage), replacing the old 15/30/5. Under Proposition 213, uninsured drivers cannot recover non-economic damages (pain and suffering) even if the other driver is at fault.