Texas Property and Casualty Exam questions with verified
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detailed answers ||
____ is uncertainty of loss - correct answer✔✔risk
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____ is a transfer of risk from the insured to the insurer - correct answer✔✔insurance
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____ risk means there is no chance of gain. It is insurable. - correct answer✔✔pure
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____ risk means there is a chance of a loss or a gain. It is not insurable. - correct
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answer✔✔speculative
a ____ is something that increases the risk. - correct answer✔✔hazard
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the principle of _____ governs property and casualty policies. It states that the purpose of
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the policy is to restore the insured financially to where they were prior to the loss - correct
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answer✔✔indemnity
_____ _____ must exist on a casualty policy at time of loss in order for the policy to provide
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coverage. - correct answer✔✔insurable interest
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the law of _____ _____ is used to predict the likelihood of loss - correct answer✔✔large
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numbers
____ ____ ____ is replacement cost minus depreciation. - correct answer✔✔actual cash
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value
,________ is a tort, or civil wrong; it is grounds for a lawsuit. - correct answer✔✔Negligence
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_______ is the failure to act as a reasonable person would in the same set of circumstances -
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correct answer✔✔negligence
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an _____ happens over a period of time - correct answer✔✔Occurrence
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a _____ may be oral or written - correct answer✔✔binder
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a _____ provides coverage until the policy is issued. it includes all coverages provided by the
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policy. - correct answer✔✔binder
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a ____ is a literal truth - correct answer✔✔warranty
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a _______ is a substantial truth. in insurance, statements of the applicant/policyowner are
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_______ - true to the best of their knowledge - correct answer✔✔representation
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______ is an omission of a material fact. - correct answer✔✔concealment
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the insurer has the right to sue a negligent third party for damages paid to an insured under
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the concept of ______ - correct answer✔✔subrogation
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four parts of a policy - correct answer✔✔DICE (declarations, insuring agreement,
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conditions, and exclusions) || ||
the ______ list the named insured, policy limits, and premium and policy period - correct
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answer✔✔declarations
,the ____ __ ____ are found on the declaration page of the policy - correct answer✔✔limits
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of liability
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the _______ _______ describes the coverages provided - correct answer✔✔insuring
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agreement
the _______ list the obligations of both parties, the insurer and the insured - correct
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answer✔✔conditions
the ______ list the perils that are not covered - correct answer✔✔exclusions
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If the Insurer and the Insured disagree that the liability policy does or does not provide
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coverage, the claim will go to _____ - correct answer✔✔arbitration
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in _____ each party pays for one and a half persons involved - correct answer✔✔arbitration
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in arbitration there are _____ arbitrators - correct answer✔✔three
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the cancellation provisions are found in the ________ section of the policy - correct
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answer✔✔conditions
the insured must promptly tell the insurer about a ______ - correct answer✔✔claim
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the other insurance clause is also known as the ____-____ _____ _______ - correct
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answer✔✔pro-rata liability clause || ||
, _____-____ does not mean equal, it is proportionate - correct answer✔✔pro-rata
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the _____ _____ _____ act protects consumers against the circulation of inaccurate or
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obsolete personal or financial information. - correct answer✔✔fair credit reporting act
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the ____-____-____ act requires that a customer be given out a privacy notice at the time
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the customer relationship is initially established and thereafter annually. - correct
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answer✔✔gramm-leach-bliley act ||
the ____ ____ insurance act applies to commercial policies only - correct
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answer✔✔terrorism risk insurance act (TRIA) || || || ||
the main difference between the various _____ _____ forms is the property perils insured
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against - correct answer✔✔dwelling policy (DP)
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DP policies do not cover personal liability, although it can be added by adding an
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endorsement known as a _____ ______ ______ for an additional premium charge - correct
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answer✔✔personal liability supplement || ||
DP policies contain general exclusions for damage due to war, nuclear hazard, and flood but
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not _____ - correct answer✔✔wind
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on a dwelling policy, other structures coverage will apply to a structure rented out as a
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_____ _____ - correct answer✔✔private garage
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DP policies do not cover _______ of ______ after 60 days of vacancy - correct
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answer✔✔breakage of glass || ||
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detailed answers ||
____ is uncertainty of loss - correct answer✔✔risk
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____ is a transfer of risk from the insured to the insurer - correct answer✔✔insurance
|| || || || || || || || || || || || || ||
____ risk means there is no chance of gain. It is insurable. - correct answer✔✔pure
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____ risk means there is a chance of a loss or a gain. It is not insurable. - correct
|| || || || || || || || || || || || || || || || || || ||
answer✔✔speculative
a ____ is something that increases the risk. - correct answer✔✔hazard
|| || || || || || || || || ||
the principle of _____ governs property and casualty policies. It states that the purpose of
|| || || || || || || || || || || || || || ||
the policy is to restore the insured financially to where they were prior to the loss - correct
|| || || || || || || || || || || || || || || || || ||
answer✔✔indemnity
_____ _____ must exist on a casualty policy at time of loss in order for the policy to provide
|| || || || || || || || || || || || || || || || || || ||
coverage. - correct answer✔✔insurable interest
|| || || ||
the law of _____ _____ is used to predict the likelihood of loss - correct answer✔✔large
|| || || || || || || || || || || || || || || ||
numbers
____ ____ ____ is replacement cost minus depreciation. - correct answer✔✔actual cash
|| || || || || || || || || || || ||
value
,________ is a tort, or civil wrong; it is grounds for a lawsuit. - correct answer✔✔Negligence
|| || || || || || || || || || || || || || ||
_______ is the failure to act as a reasonable person would in the same set of circumstances -
|| || || || || || || || || || || || || || || || ||
correct answer✔✔negligence
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an _____ happens over a period of time - correct answer✔✔Occurrence
|| || || || || || || || || ||
a _____ may be oral or written - correct answer✔✔binder
|| || || || || || || || ||
a _____ provides coverage until the policy is issued. it includes all coverages provided by the
|| || || || || || || || || || || || || || ||
policy. - correct answer✔✔binder
|| || || ||
a ____ is a literal truth - correct answer✔✔warranty
|| || || || || || || ||
a _______ is a substantial truth. in insurance, statements of the applicant/policyowner are
|| || || || || || || || || || || || ||
_______ - true to the best of their knowledge - correct answer✔✔representation
|| || || || || || || || || || ||
______ is an omission of a material fact. - correct answer✔✔concealment
|| || || || || || || || || ||
the insurer has the right to sue a negligent third party for damages paid to an insured under
|| || || || || || || || || || || || || || || || ||
the concept of ______ - correct answer✔✔subrogation
|| || || || || || ||
four parts of a policy - correct answer✔✔DICE (declarations, insuring agreement,
|| || || || || || || || || || ||
conditions, and exclusions) || ||
the ______ list the named insured, policy limits, and premium and policy period - correct
|| || || || || || || || || || || || || || ||
answer✔✔declarations
,the ____ __ ____ are found on the declaration page of the policy - correct answer✔✔limits
|| || || || || || || || || || || || || || || ||
of liability
||
the _______ _______ describes the coverages provided - correct answer✔✔insuring
|| || || || || || || || || ||
agreement
the _______ list the obligations of both parties, the insurer and the insured - correct
|| || || || || || || || || || || || || || ||
answer✔✔conditions
the ______ list the perils that are not covered - correct answer✔✔exclusions
|| || || || || || || || || || ||
If the Insurer and the Insured disagree that the liability policy does or does not provide
|| || || || || || || || || || || || || || || ||
coverage, the claim will go to _____ - correct answer✔✔arbitration
|| || || || || || || || ||
in _____ each party pays for one and a half persons involved - correct answer✔✔arbitration
|| || || || || || || || || || || || || ||
in arbitration there are _____ arbitrators - correct answer✔✔three
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the cancellation provisions are found in the ________ section of the policy - correct
|| || || || || || || || || || || || || ||
answer✔✔conditions
the insured must promptly tell the insurer about a ______ - correct answer✔✔claim
|| || || || || || || || || || || ||
the other insurance clause is also known as the ____-____ _____ _______ - correct
|| || || || || || || || || || || || || ||
answer✔✔pro-rata liability clause || ||
, _____-____ does not mean equal, it is proportionate - correct answer✔✔pro-rata
|| || || || || || || || || ||
the _____ _____ _____ act protects consumers against the circulation of inaccurate or
|| || || || || || || || || || || || ||
obsolete personal or financial information. - correct answer✔✔fair credit reporting act
|| || || || || || || || || ||
the ____-____-____ act requires that a customer be given out a privacy notice at the time
|| || || || || || || || || || || || || || || ||
the customer relationship is initially established and thereafter annually. - correct
|| || || || || || || || || || ||
answer✔✔gramm-leach-bliley act ||
the ____ ____ insurance act applies to commercial policies only - correct
|| || || || || || || || || || || ||
answer✔✔terrorism risk insurance act (TRIA) || || || ||
the main difference between the various _____ _____ forms is the property perils insured
|| || || || || || || || || || || || || ||
against - correct answer✔✔dwelling policy (DP)
|| || || || ||
DP policies do not cover personal liability, although it can be added by adding an
|| || || || || || || || || || || || || || ||
endorsement known as a _____ ______ ______ for an additional premium charge - correct
|| || || || || || || || || || || || || ||
answer✔✔personal liability supplement || ||
DP policies contain general exclusions for damage due to war, nuclear hazard, and flood but
|| || || || || || || || || || || || || ||
not _____ - correct answer✔✔wind
|| || || || ||
on a dwelling policy, other structures coverage will apply to a structure rented out as a
|| || || || || || || || || || || || || || || ||
_____ _____ - correct answer✔✔private garage
|| || || || ||
DP policies do not cover _______ of ______ after 60 days of vacancy - correct
|| || || || || || || || || || || || || || ||
answer✔✔breakage of glass || ||
