USAA Licensing Exam Questions
With 100% Correct Answers
Insurance - Answer Transfer of risk from one person or organization to an insurance
company
What is Indemnity? - Answer The principle to restore the insured to the pre-loss
economic or financial condition.
Law of Large numbers - Answer Mathematical principle used by insurers to predict
losses to charge the appropriate premiums
Insurable Interest - Answer Proof that someone stands to lose financially if a loss
occurs; must exist at the time of the loss in property and casualty insurance
Binder - Answer Temporary insurance contract; commits the company to act as if a
policy has been issued
Peril - Answer Cause of loss
Direct Loss - Answer Immediate actual physical damage to tangible property
Indirect loss - Answer Inability to use property as a result of a direct loss
Risk - Answer Chance of loss; uncertainty of loss
Speculative Risk - Answer Involves the simultaneous chance of gain or loss: is not
insurable
Physical Hazard - Answer Visible condition that increases the chance of loss
Morale Hazard - Answer Attitude of carelessness or indifference to loss
Insurer - Answer The insurance company (a.k.a. second party to the contract)
Named Insured - Answer A party named on the declarations who is purchasing the
insurance policy (a.k.a. first party to the contract)
Insured - Answer Who the insurer promises to protect in addition to the named insured
Limit of Liability - Answer The maximum amount that can be paid for a covered loss
,Consideration - Answer An exchange of value between parties to a contract
Waiver - Answer The voluntary relinquishment of a known right
What is Estopple? - Answer When an agent tells an insured/makes the statement there
is coverage for a loss when there is no such coverage, then the insurer is prevented
from denying the claim as a result of what precedent?
Concealment - Answer Insured or prospect deliberately withholding material information
from the insurer, this voids coverage
Material Misrepresentation - Answer Insured or prospect giving incorrect material
information to the insurer, this voids coverage
Warranty - Answer A written condition in the policy that must be true at the time of the
loss
Texas Department of Insurance - Answer In Texas, the insurance industry is regulated
by the
Commissioner - Answer The ( ) is appointed by the governor and heads the
Texas Department of Insurance
Adjuster - Answer According to the Texas Insurance Code, any person who investigates
or adjusts losses, or any person who supervises the handling of claims must be
licensed as an ( )
A Staff Adjuster - Answer A ( ) is on the payroll of an insurance company and is
paid a salary or by the hour
Independent Adjuster - Answer A ( ) handles claims for one or more insurance
companies and receives a fee based on time and expense.
Public Adjuster - Answer A ( ) works on behalf of the insured in negotiating a claim
settlement. In Texas a ( ) requires another separate license called a "public
adjusters license".
Insurance Agent - Answer Persons marketing (Selling) insurance products are called
( )
Alien Insurer - Answer An insurer organized and domiciled outside the United States is
called an ( )
Domestic Insurer - Answer An insurer organized, admitted, and writing insurance in
Texas is called a ( )
, A Foreign Insurer - Answer An insurer domiciled outside the state where she writes
business is called a ( )
Unfair Claim Settlement - Answer An adjuster intentionally lowballs the claim settlement
by offering less than the amount owed to the insured
Unfair Claim Settlement Practices Act - Answer An Agent collects a premium for a
policy, but does not send it to the company and allows a policy to be canceled
Unfair Claims Settlement Practices Act - Answer The insurance company fails to adopt
reasonable standards for processing claims
Unfair Claim Settlement - Answer If an adjuster were to deny a claim without conducting
a reasonable investigation. This would be an example of what type of claim settlement
violation?
Supplemental Coverages - Answer The insurance company defends the insured for a
suit arising out of a covered claim
An unfair claims settlement practice. - Answer If an adjuster were to deny a claim
without providing the policyholder with a reasonable explanation for the denial, this
would be an example of what type of claims settlement practice?
An unfair claims settlement practice - Answer If the adjuster tells the insured that he has
no coverage under a policy when the coverage really exists, this would be an example
of what type of claims settlement practice?
15 days - Answer How many days does an adjust have to acknowledge the claim
15 Business days - Answer How many days does an adjust have to accept or reject the
claim after he receives complete information?
5 calendar days - Answer How many days does an adjuster have to send the check
after he agrees to pay the claim?
What hazards does Standard Fire Protection cover? - Answer (FLI)Fire, Lightning,
Internal Explosions
What hazards does Name Peril "Basic" Cover? - Answer (FLI)+
W-Wind
C- Civil Commotion
S- Smoke
H- Hail
A- Aircraft
V- Vehicle not owned by the insured
With 100% Correct Answers
Insurance - Answer Transfer of risk from one person or organization to an insurance
company
What is Indemnity? - Answer The principle to restore the insured to the pre-loss
economic or financial condition.
Law of Large numbers - Answer Mathematical principle used by insurers to predict
losses to charge the appropriate premiums
Insurable Interest - Answer Proof that someone stands to lose financially if a loss
occurs; must exist at the time of the loss in property and casualty insurance
Binder - Answer Temporary insurance contract; commits the company to act as if a
policy has been issued
Peril - Answer Cause of loss
Direct Loss - Answer Immediate actual physical damage to tangible property
Indirect loss - Answer Inability to use property as a result of a direct loss
Risk - Answer Chance of loss; uncertainty of loss
Speculative Risk - Answer Involves the simultaneous chance of gain or loss: is not
insurable
Physical Hazard - Answer Visible condition that increases the chance of loss
Morale Hazard - Answer Attitude of carelessness or indifference to loss
Insurer - Answer The insurance company (a.k.a. second party to the contract)
Named Insured - Answer A party named on the declarations who is purchasing the
insurance policy (a.k.a. first party to the contract)
Insured - Answer Who the insurer promises to protect in addition to the named insured
Limit of Liability - Answer The maximum amount that can be paid for a covered loss
,Consideration - Answer An exchange of value between parties to a contract
Waiver - Answer The voluntary relinquishment of a known right
What is Estopple? - Answer When an agent tells an insured/makes the statement there
is coverage for a loss when there is no such coverage, then the insurer is prevented
from denying the claim as a result of what precedent?
Concealment - Answer Insured or prospect deliberately withholding material information
from the insurer, this voids coverage
Material Misrepresentation - Answer Insured or prospect giving incorrect material
information to the insurer, this voids coverage
Warranty - Answer A written condition in the policy that must be true at the time of the
loss
Texas Department of Insurance - Answer In Texas, the insurance industry is regulated
by the
Commissioner - Answer The ( ) is appointed by the governor and heads the
Texas Department of Insurance
Adjuster - Answer According to the Texas Insurance Code, any person who investigates
or adjusts losses, or any person who supervises the handling of claims must be
licensed as an ( )
A Staff Adjuster - Answer A ( ) is on the payroll of an insurance company and is
paid a salary or by the hour
Independent Adjuster - Answer A ( ) handles claims for one or more insurance
companies and receives a fee based on time and expense.
Public Adjuster - Answer A ( ) works on behalf of the insured in negotiating a claim
settlement. In Texas a ( ) requires another separate license called a "public
adjusters license".
Insurance Agent - Answer Persons marketing (Selling) insurance products are called
( )
Alien Insurer - Answer An insurer organized and domiciled outside the United States is
called an ( )
Domestic Insurer - Answer An insurer organized, admitted, and writing insurance in
Texas is called a ( )
, A Foreign Insurer - Answer An insurer domiciled outside the state where she writes
business is called a ( )
Unfair Claim Settlement - Answer An adjuster intentionally lowballs the claim settlement
by offering less than the amount owed to the insured
Unfair Claim Settlement Practices Act - Answer An Agent collects a premium for a
policy, but does not send it to the company and allows a policy to be canceled
Unfair Claims Settlement Practices Act - Answer The insurance company fails to adopt
reasonable standards for processing claims
Unfair Claim Settlement - Answer If an adjuster were to deny a claim without conducting
a reasonable investigation. This would be an example of what type of claim settlement
violation?
Supplemental Coverages - Answer The insurance company defends the insured for a
suit arising out of a covered claim
An unfair claims settlement practice. - Answer If an adjuster were to deny a claim
without providing the policyholder with a reasonable explanation for the denial, this
would be an example of what type of claims settlement practice?
An unfair claims settlement practice - Answer If the adjuster tells the insured that he has
no coverage under a policy when the coverage really exists, this would be an example
of what type of claims settlement practice?
15 days - Answer How many days does an adjust have to acknowledge the claim
15 Business days - Answer How many days does an adjust have to accept or reject the
claim after he receives complete information?
5 calendar days - Answer How many days does an adjuster have to send the check
after he agrees to pay the claim?
What hazards does Standard Fire Protection cover? - Answer (FLI)Fire, Lightning,
Internal Explosions
What hazards does Name Peril "Basic" Cover? - Answer (FLI)+
W-Wind
C- Civil Commotion
S- Smoke
H- Hail
A- Aircraft
V- Vehicle not owned by the insured
