TEXAS PROPERTY & CASUALTY
LICENSE EXAM QUESTIONS
ANSWERED CORRECTLY 100%
Property vs Casualty: What is considered property? - Correct Answer ✔✔ Structure &
Personal Property
Property vs Casualty: What is considered casualty? - Correct Answer ✔✔ Non-property
losses. Legal liability to others. 3rd Party
Risk - Correct Answer ✔✔ uncertainty of financial loss
Pure Risk - Correct Answer ✔✔ Chance of Loss
Speculative Risk - Correct Answer ✔✔ Chance of Loss or Gain (Gamble)
Insurance (covers which type of risk?) - Correct Answer ✔✔ Pure Risk Only
How does the law of large numbers apply in insurance? - Correct Answer ✔✔ Actuaries
use the law of large numbers to estimate claims
What is the law of large numbers? - Correct Answer ✔✔ as the number of a similar loss
exposure increases, the more accurate claims can be predicted from the group.
What is a peril? - Correct Answer ✔✔ cause of loss
What is a hazard? - Correct Answer ✔✔ things that increase the chance of a peril
happening
Three types of hazards - Correct Answer ✔✔ Physical: visible characteristic (dead tree)
Moral: Dishonest tendencies
Morale: Attitude of carelessness
Proximate Cause - Correct Answer ✔✔ First cause in an unbroken chain of events
Elements of a legal contract (CALC) - Correct Answer ✔✔ C - Competent parties
(18/Right frame of mind)
A - Agreement (Both parties agree)
L - Legal Purpose (The risk is LEGAL)
C - Consideration (It has to be fair)
What is representation? - Correct Answer ✔✔ Information believed to be true.
, What is misrepresentation? - Correct Answer ✔✔ Information that is not true. False
information.
What is material misrepresentation? - Correct Answer ✔✔ Information that is not true
but would have caused the insurer not to issue the policy. (4 prev spd tix)
What is fraud? - Correct Answer ✔✔ An all out effort by one party to deceive and cheat
the other.
What is warranty? - Correct Answer ✔✔ Guarantee that an insured will or will not do
something
What are the four major parts to an insurance policy structure? (DICE) - Correct Answer
✔✔ D - Declarations Page (First Page)
I - Insuring Agreement (Insurers promise to pay)
C - Conditions (Rules)
E - Exclusions (Not covered)
What information is on the declarations page? (Remember 6 Ps) - Correct Answer ✔✔
Policy Number
Parties
Property Description/Location
Policy Term
Policy Limits/Deductibles
Premium
What is Limit of Liability? - Correct Answer ✔✔ The max amount of coverage agreed to
be paid per loss
What is Aggregate Limit? - Correct Answer ✔✔ The max amount of the total of all
claims paid per policy period
Insuring Agreement? - Correct Answer ✔✔ Insurers promise to pay
Conditions - Correct Answer ✔✔ Contains the duties and rights of both parties
What are the Insured's duties after a loss? - Correct Answer ✔✔ Submit a proof of loss
or sworn statement within 91 days. Protect property from further damage. Cooperate
with the insurer.
What is the Mortgage Clause? - Correct Answer ✔✔ Nothing the insured does, even
dishonestly, can prevent the mortgagee from collecting under the policy
LICENSE EXAM QUESTIONS
ANSWERED CORRECTLY 100%
Property vs Casualty: What is considered property? - Correct Answer ✔✔ Structure &
Personal Property
Property vs Casualty: What is considered casualty? - Correct Answer ✔✔ Non-property
losses. Legal liability to others. 3rd Party
Risk - Correct Answer ✔✔ uncertainty of financial loss
Pure Risk - Correct Answer ✔✔ Chance of Loss
Speculative Risk - Correct Answer ✔✔ Chance of Loss or Gain (Gamble)
Insurance (covers which type of risk?) - Correct Answer ✔✔ Pure Risk Only
How does the law of large numbers apply in insurance? - Correct Answer ✔✔ Actuaries
use the law of large numbers to estimate claims
What is the law of large numbers? - Correct Answer ✔✔ as the number of a similar loss
exposure increases, the more accurate claims can be predicted from the group.
What is a peril? - Correct Answer ✔✔ cause of loss
What is a hazard? - Correct Answer ✔✔ things that increase the chance of a peril
happening
Three types of hazards - Correct Answer ✔✔ Physical: visible characteristic (dead tree)
Moral: Dishonest tendencies
Morale: Attitude of carelessness
Proximate Cause - Correct Answer ✔✔ First cause in an unbroken chain of events
Elements of a legal contract (CALC) - Correct Answer ✔✔ C - Competent parties
(18/Right frame of mind)
A - Agreement (Both parties agree)
L - Legal Purpose (The risk is LEGAL)
C - Consideration (It has to be fair)
What is representation? - Correct Answer ✔✔ Information believed to be true.
, What is misrepresentation? - Correct Answer ✔✔ Information that is not true. False
information.
What is material misrepresentation? - Correct Answer ✔✔ Information that is not true
but would have caused the insurer not to issue the policy. (4 prev spd tix)
What is fraud? - Correct Answer ✔✔ An all out effort by one party to deceive and cheat
the other.
What is warranty? - Correct Answer ✔✔ Guarantee that an insured will or will not do
something
What are the four major parts to an insurance policy structure? (DICE) - Correct Answer
✔✔ D - Declarations Page (First Page)
I - Insuring Agreement (Insurers promise to pay)
C - Conditions (Rules)
E - Exclusions (Not covered)
What information is on the declarations page? (Remember 6 Ps) - Correct Answer ✔✔
Policy Number
Parties
Property Description/Location
Policy Term
Policy Limits/Deductibles
Premium
What is Limit of Liability? - Correct Answer ✔✔ The max amount of coverage agreed to
be paid per loss
What is Aggregate Limit? - Correct Answer ✔✔ The max amount of the total of all
claims paid per policy period
Insuring Agreement? - Correct Answer ✔✔ Insurers promise to pay
Conditions - Correct Answer ✔✔ Contains the duties and rights of both parties
What are the Insured's duties after a loss? - Correct Answer ✔✔ Submit a proof of loss
or sworn statement within 91 days. Protect property from further damage. Cooperate
with the insurer.
What is the Mortgage Clause? - Correct Answer ✔✔ Nothing the insured does, even
dishonestly, can prevent the mortgagee from collecting under the policy
