TEXAS INSURANCE LICENSE EXAM 2026 WITH TEXAS INSURANCE LICENSE EXAM 2026 WITH
100% CORRECT ANSWERS 100% CORRECT ANSWERS
Josh attends a hockey game. While at the game he is hit in the head by the hockey puck resulting in a
broken cheek bone. Josh immediately sues the hockey team for damages. What might be the most
Susie set fire to her house to collect the insurance. This is an example of a(n) - correct answer MORAL
logical defense for the hockey team? - correct answer ASSUMPTION OF RISK
HAZARDS
The Smith family is planning to build a new house. They want the house to be constructed entirely of fire
Henry's tires on his SUV are so worn that the steel belt is showing through the tread. The condition of
resistance materials. This construction type is an example of a - correct answer FIRE RESISTIVE building.
the tires is known as - correct answer PHYSICAL HAZARDS
______contracts are written for a specified amount and they list the value of the insured property as
When a driver of an auto breaks the posted speed limit, the driver's liability imposed by the law is
agreed to by both the insured and the insurer at policy inception. - correct answer VALUED
known as - correct answer ABOSLUTE LIABILITY
The ABC Company has several business locations. They want to cover all the locations under one policy.
Under compensatory damages, medical expenses are an example of - correct answer SPECIAL damages.
They should purchase a(n) - correct answer BLANKET policy
Josh attends a hockey game. While at the game he is hit in the head by the hockey puck resulting in a
A building has a market value of $100,000, a replacement cost of $80,000 and a depreciated amount of
broken cheek bone. Josh immediately sues the hockey team for damages. What might be the most
$25,000. Based on these factors, what is the ACV amount of the building? - correct answer ($80,000 -
logical defense for the hockey team? - correct answer ASSUMPTION OF RISK
$25,000 = $55,000) Actual cash value, or ACV is usually calculated by determining the item's
replacement cost (what it would cost to buy a replacement) and subtracting an amount for depreciation.
Here's what it looks like written as a formula: ACV = Replacement Cost - Depreciation
The Smith family is planning to build a new house. They want the house to be constructed entirely of fire
resistance materials. This construction type is an example of a - correct answer FIRE RESISTIVE building.
Joe has just purchased a new house. He wants to obtain the broadest possible insurance coverage. Joe
should purchase a(n) - correct answer SPECIAL FORMS policy.
________ contracts are written for a specified amount and they list the value of the insured property as
agreed to by both the insured and the insurer at policy inception. - correct answer Susie set fire to her
house to collect the insurance. This is an example of a(n) MORAL HAZARDS
Which of the following is NOT a method by which an insured can collect for damages? - correct answer
In general, the insured can collect the lesser of: Insurable interest; Policy limits; Actual cash value; Cost
to repair; or Replacement cost.
Henry's tires on his SUV are so worn that the steel belt is showing through the tread. The condition of
the tires is known as - correct answer PHYSICAL HAZARDS
Which one of the following terms can be defined as a policy provision that omits certain risks from
coverage? - correct answer EXCLUSIONS
When a driver of an auto breaks the posted speed limit, the driver's liability imposed by the law is
known as - correct answer ABOSLUTE LIABILITY
Joe asked his insurance agent to explain the purpose of the conditions section of his insurance policy.
Joe's agent stated that it is used to _____. - correct answer Policy conditions
Under compensatory damages, medical expenses are an example of - correct answer SPECIAL damages.
, TEXAS INSURANCE LICENSE EXAM 2026 WITH TEXAS INSURANCE LICENSE EXAM 2026 WITH
100% CORRECT ANSWERS 100% CORRECT ANSWERS
Jane has decided to add towing to her current auto policy with the ABC Insurance Company. What must Ron sold his house to Connor. Ron calls his agent to inform him to assign the homeowners' policy to
the ABC Insurance Company do to add the requested change to the policy? - correct answer Connor. What should Ron's agent do? - correct answer Assignment is a condition in insurance policies
ENDORSEMENTS that specifies that the policy cannot be transferred to another unless the company consents to the
transfer in writing.
Doug has just received his insurance policy. Where would Doug look to find the applicable deductibles
declared in the insurance policy? - correct answer DECLARATIONS Mark's liability policy has separate limits of liability for both BI and PD. This liability type is an example of
- correct answer SPLIT LIMITS.
The XYZ Insurance Company is developing a new auto insurance contract. Which of the following is NOT
considered a major component of this insurance contract? - correct answer The contract does not Earl lives in Iowa. On November 1st, he drives his motor home to Pharr, Texas to reside. He lives in the
require the naming of senior officers of the insurance company. motor home until March 15th, then returns to his house in Iowa. According to the policy his insured
house during his absence is an example of a(n) - correct answer UNOCCUPIED property.
Crossroad's commercial insurance coverage is automatically extended to cover newly acquired or
constructed locations and personal property covered off-premises within the policy territory. Which is Jack sends in an auto insurance application with the required premium. The submission of the premium
generally NOT covered under the policy territory? . On commercial policies, the policy territory is usually is an example of - correct answer _CONSIDERATION.
the United States, Canada and Puerto Rico. - correct answer
Tom has completed an auto insurance application and sent it to the insurance company. Under contract
The State Insurance Company has decided to non-renew Craig's auto insurance policy. The State law, the submission of the auto application is a(n) - correct answer INITIAL OFFER.
Insurance Company must - correct answer GIVE AT LEAST 30 DAYS NOTICE OF NONRENEWAL.
The ABC Insurance Company has agreed to pay for any auto losses that Bill might have for a one year
The State Insurance Company has decided to non-renew Janet's homeowners' insurance policy. The period in exchange for $1,000 in premium. This is an example of a(n) - correct answer CONTRACT.
State Insurance Company must. - correct answer GIVE AT LEAST 30 DAYS NOTICE OF CANCELLATION
FOR ANY REASON
Valid contracts must have a legal purpose and be consistent with public policy. Which of the following
situations lacks a legal purpose? - correct answer Valid contracts must have a legal purpose and be
Alfred wants to cancel his auto insurance policy. Which of the following is the most appropriate method consistent with public policy. This is why insurance does not cover intentional or criminal actions, why
to accomplish this task? - correct answer GIVE WRITTEN NOTICE every insured must have an insurable interest, and why a thief cannot insure stolen property.
The Big A Computer Store's commercial policy has a limit of liability that applies to all losses occurring Under the law, a party to a contract must give something of value to the other party Which of the
within any one policy period. This liability limit is an example of a(n) - correct answer AGGREGATE limit. following is NOT an example of consideration? - correct answer GIFT
Mike trips over a tricycle in his neighbor's driveway. According to the Limits of Liability section of the Kathy, a 16 year old high school student, just purchased a new car. She went to her dad's insurance
neighbor's homeowners' policy, Mike's accident is an example of a(n) - correct answer OCCURRENCE. agent and made an application for her own auto insurance policy. The insurance company's underwriter
noted Kathy's age and it caused him to reject her application. The rejection was based on the fact that -
correct answer NOT LEGALLY COMPETENT TO ENTER INTO CONTRACT.
100% CORRECT ANSWERS 100% CORRECT ANSWERS
Josh attends a hockey game. While at the game he is hit in the head by the hockey puck resulting in a
broken cheek bone. Josh immediately sues the hockey team for damages. What might be the most
Susie set fire to her house to collect the insurance. This is an example of a(n) - correct answer MORAL
logical defense for the hockey team? - correct answer ASSUMPTION OF RISK
HAZARDS
The Smith family is planning to build a new house. They want the house to be constructed entirely of fire
Henry's tires on his SUV are so worn that the steel belt is showing through the tread. The condition of
resistance materials. This construction type is an example of a - correct answer FIRE RESISTIVE building.
the tires is known as - correct answer PHYSICAL HAZARDS
______contracts are written for a specified amount and they list the value of the insured property as
When a driver of an auto breaks the posted speed limit, the driver's liability imposed by the law is
agreed to by both the insured and the insurer at policy inception. - correct answer VALUED
known as - correct answer ABOSLUTE LIABILITY
The ABC Company has several business locations. They want to cover all the locations under one policy.
Under compensatory damages, medical expenses are an example of - correct answer SPECIAL damages.
They should purchase a(n) - correct answer BLANKET policy
Josh attends a hockey game. While at the game he is hit in the head by the hockey puck resulting in a
A building has a market value of $100,000, a replacement cost of $80,000 and a depreciated amount of
broken cheek bone. Josh immediately sues the hockey team for damages. What might be the most
$25,000. Based on these factors, what is the ACV amount of the building? - correct answer ($80,000 -
logical defense for the hockey team? - correct answer ASSUMPTION OF RISK
$25,000 = $55,000) Actual cash value, or ACV is usually calculated by determining the item's
replacement cost (what it would cost to buy a replacement) and subtracting an amount for depreciation.
Here's what it looks like written as a formula: ACV = Replacement Cost - Depreciation
The Smith family is planning to build a new house. They want the house to be constructed entirely of fire
resistance materials. This construction type is an example of a - correct answer FIRE RESISTIVE building.
Joe has just purchased a new house. He wants to obtain the broadest possible insurance coverage. Joe
should purchase a(n) - correct answer SPECIAL FORMS policy.
________ contracts are written for a specified amount and they list the value of the insured property as
agreed to by both the insured and the insurer at policy inception. - correct answer Susie set fire to her
house to collect the insurance. This is an example of a(n) MORAL HAZARDS
Which of the following is NOT a method by which an insured can collect for damages? - correct answer
In general, the insured can collect the lesser of: Insurable interest; Policy limits; Actual cash value; Cost
to repair; or Replacement cost.
Henry's tires on his SUV are so worn that the steel belt is showing through the tread. The condition of
the tires is known as - correct answer PHYSICAL HAZARDS
Which one of the following terms can be defined as a policy provision that omits certain risks from
coverage? - correct answer EXCLUSIONS
When a driver of an auto breaks the posted speed limit, the driver's liability imposed by the law is
known as - correct answer ABOSLUTE LIABILITY
Joe asked his insurance agent to explain the purpose of the conditions section of his insurance policy.
Joe's agent stated that it is used to _____. - correct answer Policy conditions
Under compensatory damages, medical expenses are an example of - correct answer SPECIAL damages.
, TEXAS INSURANCE LICENSE EXAM 2026 WITH TEXAS INSURANCE LICENSE EXAM 2026 WITH
100% CORRECT ANSWERS 100% CORRECT ANSWERS
Jane has decided to add towing to her current auto policy with the ABC Insurance Company. What must Ron sold his house to Connor. Ron calls his agent to inform him to assign the homeowners' policy to
the ABC Insurance Company do to add the requested change to the policy? - correct answer Connor. What should Ron's agent do? - correct answer Assignment is a condition in insurance policies
ENDORSEMENTS that specifies that the policy cannot be transferred to another unless the company consents to the
transfer in writing.
Doug has just received his insurance policy. Where would Doug look to find the applicable deductibles
declared in the insurance policy? - correct answer DECLARATIONS Mark's liability policy has separate limits of liability for both BI and PD. This liability type is an example of
- correct answer SPLIT LIMITS.
The XYZ Insurance Company is developing a new auto insurance contract. Which of the following is NOT
considered a major component of this insurance contract? - correct answer The contract does not Earl lives in Iowa. On November 1st, he drives his motor home to Pharr, Texas to reside. He lives in the
require the naming of senior officers of the insurance company. motor home until March 15th, then returns to his house in Iowa. According to the policy his insured
house during his absence is an example of a(n) - correct answer UNOCCUPIED property.
Crossroad's commercial insurance coverage is automatically extended to cover newly acquired or
constructed locations and personal property covered off-premises within the policy territory. Which is Jack sends in an auto insurance application with the required premium. The submission of the premium
generally NOT covered under the policy territory? . On commercial policies, the policy territory is usually is an example of - correct answer _CONSIDERATION.
the United States, Canada and Puerto Rico. - correct answer
Tom has completed an auto insurance application and sent it to the insurance company. Under contract
The State Insurance Company has decided to non-renew Craig's auto insurance policy. The State law, the submission of the auto application is a(n) - correct answer INITIAL OFFER.
Insurance Company must - correct answer GIVE AT LEAST 30 DAYS NOTICE OF NONRENEWAL.
The ABC Insurance Company has agreed to pay for any auto losses that Bill might have for a one year
The State Insurance Company has decided to non-renew Janet's homeowners' insurance policy. The period in exchange for $1,000 in premium. This is an example of a(n) - correct answer CONTRACT.
State Insurance Company must. - correct answer GIVE AT LEAST 30 DAYS NOTICE OF CANCELLATION
FOR ANY REASON
Valid contracts must have a legal purpose and be consistent with public policy. Which of the following
situations lacks a legal purpose? - correct answer Valid contracts must have a legal purpose and be
Alfred wants to cancel his auto insurance policy. Which of the following is the most appropriate method consistent with public policy. This is why insurance does not cover intentional or criminal actions, why
to accomplish this task? - correct answer GIVE WRITTEN NOTICE every insured must have an insurable interest, and why a thief cannot insure stolen property.
The Big A Computer Store's commercial policy has a limit of liability that applies to all losses occurring Under the law, a party to a contract must give something of value to the other party Which of the
within any one policy period. This liability limit is an example of a(n) - correct answer AGGREGATE limit. following is NOT an example of consideration? - correct answer GIFT
Mike trips over a tricycle in his neighbor's driveway. According to the Limits of Liability section of the Kathy, a 16 year old high school student, just purchased a new car. She went to her dad's insurance
neighbor's homeowners' policy, Mike's accident is an example of a(n) - correct answer OCCURRENCE. agent and made an application for her own auto insurance policy. The insurance company's underwriter
noted Kathy's age and it caused him to reject her application. The rejection was based on the fact that -
correct answer NOT LEGALLY COMPETENT TO ENTER INTO CONTRACT.
