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TEXAS PROPERTY & CASUALTY INSURANCE EXAM | NEW ACTUAL
EXAM WITH 100% VERIFIED QUESTIONS AND CORRECT SOLUTIONS |
LATEST UPDATE 2026/2027 | GUARANTEED VALUE PACK | GRADED A+.
1. A condition or situation that presents a possibility of loss is a (an): - correct
answer - exposure
2. The purpose of insurance is to: - correct answer - transfer risk
3. Which risk is insurable? - correct answer - pure
4. With regard to insurance, risk can be defined as: - correct answer -
uncertainty regarding loss
5. Treating risk by purchasing insurance is an example of what type of risk
management? - correct answer - transfer
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6. Robert and Carolyn live in a busy city and decide that not owning a car is
the solution to not experience having a car stolen. What method describes
this philosophy? - correct answer - avoidance
7. Dishonesty on the part of an insured is an example of what? - correct
answer - a moral hazard
8. Which hazard can be described as a careless attitude or general
indifference on the part of the insured toward the occurrence of loss? -
correct answer - morale
9. What is an example of reduction as a method of handling risk? - correct
answer - Installing a burglar alarm
10. Driving too fast and not wearing a seat belt are examples of? - correct
answer - morale hazard
11. The risk that involves the chance of both loss and gain is? - correct answer -
speculative risk
12. Self-insurance is an example of what kind of risk treatment? - correct
answer - Retention
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13. If John's father transfers ownership of a house to John, can John buy
insurance? - correct answer - Yes because he has an insurable interest.
14. What kind of risk is the stock market? - correct answer - speculative risk
15. A ____ is a condition that increases the chance of loss. - correct answer -
hazard
16. Faulty wiring causes a fire that destroys a building. The faulty wiring is
considered to be a(n): - correct answer - hazard
17. A chance, possibility, or uncertainty of loss is known as? - correct answer -
risk
18. Examples of perils are_____? - correct answer - fire, wind and lightning
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19. Indemnity insurance will _____? - correct answer - restores insured to pre-
loss condition
20. The types of hazards are_____? - correct answer - moral, morale, and
physical
21. Fire would be an example of a what? - correct answer - peril
22. What is the actual cause of a loss? - correct answer - peril
23. ________ is when people with a greater than average exposure to loss to
purchase insurance. - correct answer - Adverse selection
24. Methods of handling risk are avoidance, reduction, retention, transfer and
_____. - correct answer - Sharing (ARRTS)
25. Elements of insurable risk are calculable, affordable, noncatastrophic,
homogenous, accidental and _____. - correct answer - Measurable
(CANHAM)
TEXAS PROPERTY & CASUALTY INSURANCE EXAM | NEW ACTUAL
EXAM WITH 100% VERIFIED QUESTIONS AND CORRECT SOLUTIONS |
LATEST UPDATE 2026/2027 | GUARANTEED VALUE PACK | GRADED A+.
1. A condition or situation that presents a possibility of loss is a (an): - correct
answer - exposure
2. The purpose of insurance is to: - correct answer - transfer risk
3. Which risk is insurable? - correct answer - pure
4. With regard to insurance, risk can be defined as: - correct answer -
uncertainty regarding loss
5. Treating risk by purchasing insurance is an example of what type of risk
management? - correct answer - transfer
, Page|2
6. Robert and Carolyn live in a busy city and decide that not owning a car is
the solution to not experience having a car stolen. What method describes
this philosophy? - correct answer - avoidance
7. Dishonesty on the part of an insured is an example of what? - correct
answer - a moral hazard
8. Which hazard can be described as a careless attitude or general
indifference on the part of the insured toward the occurrence of loss? -
correct answer - morale
9. What is an example of reduction as a method of handling risk? - correct
answer - Installing a burglar alarm
10. Driving too fast and not wearing a seat belt are examples of? - correct
answer - morale hazard
11. The risk that involves the chance of both loss and gain is? - correct answer -
speculative risk
12. Self-insurance is an example of what kind of risk treatment? - correct
answer - Retention
, Page|3
13. If John's father transfers ownership of a house to John, can John buy
insurance? - correct answer - Yes because he has an insurable interest.
14. What kind of risk is the stock market? - correct answer - speculative risk
15. A ____ is a condition that increases the chance of loss. - correct answer -
hazard
16. Faulty wiring causes a fire that destroys a building. The faulty wiring is
considered to be a(n): - correct answer - hazard
17. A chance, possibility, or uncertainty of loss is known as? - correct answer -
risk
18. Examples of perils are_____? - correct answer - fire, wind and lightning
, Page|4
19. Indemnity insurance will _____? - correct answer - restores insured to pre-
loss condition
20. The types of hazards are_____? - correct answer - moral, morale, and
physical
21. Fire would be an example of a what? - correct answer - peril
22. What is the actual cause of a loss? - correct answer - peril
23. ________ is when people with a greater than average exposure to loss to
purchase insurance. - correct answer - Adverse selection
24. Methods of handling risk are avoidance, reduction, retention, transfer and
_____. - correct answer - Sharing (ARRTS)
25. Elements of insurable risk are calculable, affordable, noncatastrophic,
homogenous, accidental and _____. - correct answer - Measurable
(CANHAM)
