Page |1 | |
TEXAS PROPERTY & CASUALTY INSURANCE
EXAM 2026 BRAND NEW ACTUAL EXAM WITH
100% VERIFIED QUESTIONS AND CORRECT
SOLUTIONS
1. A condition or situation that presents a possibility of loss is a (an): -
| | | | | | | | | | | | |
correct answer - exposure
| | | |
2. The purpose of insurance is to: - correct answer - transfer risk
| | | | | | | | | | |
3. Which hazard can be described as a careless attitude or general
| | | | | | | | | |
indifference on the part of the insured toward the occurrence of loss? -
| | | | | | | | | | | | |
correct answer - morale
| | | |
4. Which risk is insurable? - correct answer - pure
| | | | | | | |
5. With regard to insurance, risk can be defined as: - correct answer -
| | | | | | | | | | | |
uncertainty regarding loss
| | |
, Page |2 | |
6. Treating risk by purchasing insurance is an example of what type of risk
| | | | | | | | | | | |
management? - correct answer - transfer
| | | | | |
7. Robert and Carolyn live in a busy city and decide that not owning a car is
| | | | | | | | | | | | | | |
the solution to not experience having a car stolen. What method
| | | | | | | | | | |
describes this philosophy? - correct answer - avoidance
| | | | | | | |
8. Dishonesty on the part of an insured is an example of what? - correct
| | | | | | | | | | | | |
answer - a moral hazard
| | | | |
9. What is an example of reduction as a method of handling risk? - correct
| | | | | | | | | | | | |
answer - Installing a burglar alarm
| | | | | |
10. Driving too fast and not wearing a seat belt are examples of? - correct
| | | | | | | | | | | | |
answer - morale hazard
| | | |
11. The risk that involves the chance of both loss and gain is? - correct
| | | | | | | | | | | | |
answer - speculative risk
| | | |
12. Self-insurance is an example of what kind of risk treatment? - correct | | | | | | | | | | |
answer - Retention
| | |
, Page |3 | |
13. If John's father transfers ownership of a house to John, can John buy
| | | | | | | | | | | |
insurance? - correct answer - Yes because he has an insurable interest.
| | | | | | | | | | | |
14. Fire would be an example of a what? - correct answer - peril
| | | | | | | | | | | |
15. What is the actual cause of a loss? - correct answer - peril
| | | | | | | | | | | |
16. What kind of risk is the stock market? - correct answer - speculative
| | | | | | | | | | | |
risk
|
17. A |is a condition that increases the chance of loss. - correct
| | | | | | | | | |
answer - hazard
| | |
18. Faulty wiring causes a fire that destroys a building. The faulty wiring is
| | | | | | | | | | | |
considered to be a(n): - correct answer - hazard
| | | | | | | | |
19. A chance, possibility, or uncertainty of loss is known as? - correct
| | | | | | | | | | |
answer - risk
| | |
, Page |4 | |
20. Examples of perils are | | | ? - correct answer - fire, wind and
| | | | | | |
lightning
|
21. Indemnity insurance will | | | ? - correct answer - restores insured to
| | | | | | |
pre-loss condition
| |
22. The types of hazards are
| | | | ? - correct answer - moral, morale,
| | | | | |
and physical
| |
23. is when people with a greater than average exposure to | | | | | | | | |
loss to purchase insurance. - correct answer - Adverse selection
| | | | | | | | | |
24. Methods of handling risk are avoidance, reduction, retention, transfer
| | | | | | | |
and
| . - correct answer - Sharing (ARRTS)
| | | | | | |
25. Elements of insurable risk are calculable, affordable, non-
| | | | | | |
catastrophic, homogenous, accidental and
| . - correct answer -
| | | | | | | |
Measurable (CANHAM)
| |
26. Myron, who is 16, signs a contract to lease a car. This would probably
| | | | | | | | | | | | |
not be considered a valid contract under the law because
| | | .- | | | | | | | | |
correct answer - He is not competent at 16.
| | | | | | | | |
TEXAS PROPERTY & CASUALTY INSURANCE
EXAM 2026 BRAND NEW ACTUAL EXAM WITH
100% VERIFIED QUESTIONS AND CORRECT
SOLUTIONS
1. A condition or situation that presents a possibility of loss is a (an): -
| | | | | | | | | | | | |
correct answer - exposure
| | | |
2. The purpose of insurance is to: - correct answer - transfer risk
| | | | | | | | | | |
3. Which hazard can be described as a careless attitude or general
| | | | | | | | | |
indifference on the part of the insured toward the occurrence of loss? -
| | | | | | | | | | | | |
correct answer - morale
| | | |
4. Which risk is insurable? - correct answer - pure
| | | | | | | |
5. With regard to insurance, risk can be defined as: - correct answer -
| | | | | | | | | | | |
uncertainty regarding loss
| | |
, Page |2 | |
6. Treating risk by purchasing insurance is an example of what type of risk
| | | | | | | | | | | |
management? - correct answer - transfer
| | | | | |
7. Robert and Carolyn live in a busy city and decide that not owning a car is
| | | | | | | | | | | | | | |
the solution to not experience having a car stolen. What method
| | | | | | | | | | |
describes this philosophy? - correct answer - avoidance
| | | | | | | |
8. Dishonesty on the part of an insured is an example of what? - correct
| | | | | | | | | | | | |
answer - a moral hazard
| | | | |
9. What is an example of reduction as a method of handling risk? - correct
| | | | | | | | | | | | |
answer - Installing a burglar alarm
| | | | | |
10. Driving too fast and not wearing a seat belt are examples of? - correct
| | | | | | | | | | | | |
answer - morale hazard
| | | |
11. The risk that involves the chance of both loss and gain is? - correct
| | | | | | | | | | | | |
answer - speculative risk
| | | |
12. Self-insurance is an example of what kind of risk treatment? - correct | | | | | | | | | | |
answer - Retention
| | |
, Page |3 | |
13. If John's father transfers ownership of a house to John, can John buy
| | | | | | | | | | | |
insurance? - correct answer - Yes because he has an insurable interest.
| | | | | | | | | | | |
14. Fire would be an example of a what? - correct answer - peril
| | | | | | | | | | | |
15. What is the actual cause of a loss? - correct answer - peril
| | | | | | | | | | | |
16. What kind of risk is the stock market? - correct answer - speculative
| | | | | | | | | | | |
risk
|
17. A |is a condition that increases the chance of loss. - correct
| | | | | | | | | |
answer - hazard
| | |
18. Faulty wiring causes a fire that destroys a building. The faulty wiring is
| | | | | | | | | | | |
considered to be a(n): - correct answer - hazard
| | | | | | | | |
19. A chance, possibility, or uncertainty of loss is known as? - correct
| | | | | | | | | | |
answer - risk
| | |
, Page |4 | |
20. Examples of perils are | | | ? - correct answer - fire, wind and
| | | | | | |
lightning
|
21. Indemnity insurance will | | | ? - correct answer - restores insured to
| | | | | | |
pre-loss condition
| |
22. The types of hazards are
| | | | ? - correct answer - moral, morale,
| | | | | |
and physical
| |
23. is when people with a greater than average exposure to | | | | | | | | |
loss to purchase insurance. - correct answer - Adverse selection
| | | | | | | | | |
24. Methods of handling risk are avoidance, reduction, retention, transfer
| | | | | | | |
and
| . - correct answer - Sharing (ARRTS)
| | | | | | |
25. Elements of insurable risk are calculable, affordable, non-
| | | | | | |
catastrophic, homogenous, accidental and
| . - correct answer -
| | | | | | | |
Measurable (CANHAM)
| |
26. Myron, who is 16, signs a contract to lease a car. This would probably
| | | | | | | | | | | | |
not be considered a valid contract under the law because
| | | .- | | | | | | | | |
correct answer - He is not competent at 16.
| | | | | | | | |
