Texas Property & Casualty License Exam with verified detailed
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solutions
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Property vs Casualty: What is considered property? - correct answer✔✔Structure &
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Personal Property ||
Property vs Casualty: What is considered casualty? - correct answer✔✔Non-property losses.
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Legal liability to others. 3rd Party
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Risk - correct answer✔✔uncertainty of financial loss
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Pure Risk - correct answer✔✔Chance of Loss
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Speculative Risk - correct answer✔✔Chance of Loss or Gain (Gamble)|| || || || || || || || ||
Insurance (covers which type of risk?) - correct answer✔✔Pure Risk Only
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How does the law of large numbers apply in insurance? - correct answer✔✔Actuaries use
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the law of large numbers to estimate claims
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What is the law of large numbers? - correct answer✔✔as the number of a similar loss
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exposure increases, the more accurate claims can be predicted from the group.
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What is a peril? - correct answer✔✔cause of loss
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What is a hazard? - correct answer✔✔things that increase the chance of a peril happening
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, Three types of hazards - correct answer✔✔Physical: visible characteristic (dead tree)
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Moral: Dishonest tendencies
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Morale: Attitude of carelessness
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Proximate Cause - correct answer✔✔First cause in an unbroken chain of events
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Elements of a legal contract (CALC) - correct answer✔✔C - Competent parties (18/Right
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frame of mind) || ||
A - Agreement (Both parties agree)
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L - Legal Purpose (The risk is LEGAL)
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C - Consideration (It has to be fair)
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What is representation? - correct answer✔✔Information believed to be true.
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What is misrepresentation? - correct answer✔✔Information that is not true. False
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information.
What is material misrepresentation? - correct answer✔✔Information that is not true but
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would have caused the insurer not to issue the policy. (4 prev spd tix)
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What is fraud? - correct answer✔✔An all out effort by one party to deceive and cheat the
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other.
What is warranty? - correct answer✔✔Guarantee that an insured will or will not do
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something
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solutions
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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
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What is a hazard? - correct answer✔✔things that increase the chance of a peril happening
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, Three types of hazards - correct answer✔✔Physical: visible characteristic (dead tree)
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Moral: Dishonest tendencies
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Morale: Attitude of carelessness
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Proximate Cause - correct answer✔✔First cause in an unbroken chain of events
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Elements of a legal contract (CALC) - correct answer✔✔C - Competent parties (18/Right
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frame of mind) || ||
A - Agreement (Both parties agree)
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L - Legal Purpose (The risk is LEGAL)
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C - Consideration (It has to be fair)
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What is representation? - correct answer✔✔Information believed to be true.
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What is misrepresentation? - correct answer✔✔Information that is not true. False
|| || || || || || || || || || ||
information.
What is material misrepresentation? - correct answer✔✔Information that is not true but
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would have caused the insurer not to issue the policy. (4 prev spd tix)
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What is fraud? - correct answer✔✔An all out effort by one party to deceive and cheat the
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other.
What is warranty? - correct answer✔✔Guarantee that an insured will or will not do
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something
