USAA LICENSING EXAMS ACTUAL TEST PAPER
2026 COMPLETE QUESTIONS AND ANSWERS
GRADED A+
◉ Indemnity. Answer: The principle to restore the insured to the
pre-loss economic or financial condition.
◉ Law of Large numbers. Answer: Mathematical principle used by
insurers to predict losses to charge the appropriate premiums
◉ Insurable Interest. Answer: Proof that someone stands to lose
financially if a loss occurs; must exist at the time of the loss in
property and casualty insurance
◉ Binder. Answer: Temporary insurance contract; commits the
company to act as if a policy has been issued
◉ Peril. Answer: Cause of loss
◉ Direct Loss. Answer: Immediate actual physical damage to
tangible property
,◉ Indirect loss. Answer: Inability to use property as a result of a
direct loss
◉ Risk. Answer: Chance of loss; uncertainty of loss
◉ What are the two types of risk?. Answer: Speculative and Pure
◉ Speculative Risk. Answer: Involves the simultaneous chance of
gain or loss: is not insurable
◉ Pure Risk. Answer: a risk that presents the chance of loss but no
opportunity for gain (insurable)
◉ What are two examples of speculative risk?. Answer: Gambling
Investing
◉ What is an example of your risk?. Answer: Car accident
◉ Physical hazards include. Answer: Visible condition that increases
the chance of loss
◉ Morale Hazard. Answer: Attitude of carelessness or indifference to
loss
,◉ Insurer. Answer: The insurance company (a.k.a. second party to
the contract)
◉ Named Insured. Answer: A party named on the declarations who
is purchasing the insurance policy (a.k.a. first party to the contract)
◉ Insured. Answer: Who the insurer promises to protect in addition
to the named insured
◉ Limit of Liability. Answer: The maximum amount that can be paid
for a covered loss
◉ Consideration. Answer: An exchange of value between parties to a
contract
◉ Waiver. Answer: The voluntary relinquishment of a known right
◉ What is Estopple?. Answer: When an agent tells an insured/makes
the statement there is coverage for a loss when there is no such
coverage, then the insurer is prevented from denying the claim as a
result of what precedent?
, ◉ Concealment. Answer: Insured or prospect deliberately
withholding material information from the insurer, this voids
coverage
◉ Material Misrepresentation. Answer: Insured or prospect giving
incorrect material information to the insurer, this voids coverage
◉ Warranty. Answer: A written condition in the policy that must be
true at the time of the loss
◉ Texas Department of Insurance. Answer: In Texas, the insurance
industry is regulated by the
◉ Commissioner. Answer: The (_______) is appointed by the governor
and heads the Texas Department of Insurance
◉ Adjuster. Answer: According to the Texas Insurance Code, any
person who investigates or adjusts losses, or any person who
supervises the handling of claims must be licensed as an
(_______________)
◉ A Staff Adjuster. Answer: A (_____) is on the payroll of an insurance
company and is paid a salary or by the hour
2026 COMPLETE QUESTIONS AND ANSWERS
GRADED A+
◉ Indemnity. Answer: The principle to restore the insured to the
pre-loss economic or financial condition.
◉ Law of Large numbers. Answer: Mathematical principle used by
insurers to predict losses to charge the appropriate premiums
◉ Insurable Interest. Answer: Proof that someone stands to lose
financially if a loss occurs; must exist at the time of the loss in
property and casualty insurance
◉ Binder. Answer: Temporary insurance contract; commits the
company to act as if a policy has been issued
◉ Peril. Answer: Cause of loss
◉ Direct Loss. Answer: Immediate actual physical damage to
tangible property
,◉ Indirect loss. Answer: Inability to use property as a result of a
direct loss
◉ Risk. Answer: Chance of loss; uncertainty of loss
◉ What are the two types of risk?. Answer: Speculative and Pure
◉ Speculative Risk. Answer: Involves the simultaneous chance of
gain or loss: is not insurable
◉ Pure Risk. Answer: a risk that presents the chance of loss but no
opportunity for gain (insurable)
◉ What are two examples of speculative risk?. Answer: Gambling
Investing
◉ What is an example of your risk?. Answer: Car accident
◉ Physical hazards include. Answer: Visible condition that increases
the chance of loss
◉ Morale Hazard. Answer: Attitude of carelessness or indifference to
loss
,◉ Insurer. Answer: The insurance company (a.k.a. second party to
the contract)
◉ Named Insured. Answer: A party named on the declarations who
is purchasing the insurance policy (a.k.a. first party to the contract)
◉ Insured. Answer: Who the insurer promises to protect in addition
to the named insured
◉ Limit of Liability. Answer: The maximum amount that can be paid
for a covered loss
◉ Consideration. Answer: An exchange of value between parties to a
contract
◉ Waiver. Answer: The voluntary relinquishment of a known right
◉ What is Estopple?. Answer: When an agent tells an insured/makes
the statement there is coverage for a loss when there is no such
coverage, then the insurer is prevented from denying the claim as a
result of what precedent?
, ◉ Concealment. Answer: Insured or prospect deliberately
withholding material information from the insurer, this voids
coverage
◉ Material Misrepresentation. Answer: Insured or prospect giving
incorrect material information to the insurer, this voids coverage
◉ Warranty. Answer: A written condition in the policy that must be
true at the time of the loss
◉ Texas Department of Insurance. Answer: In Texas, the insurance
industry is regulated by the
◉ Commissioner. Answer: The (_______) is appointed by the governor
and heads the Texas Department of Insurance
◉ Adjuster. Answer: According to the Texas Insurance Code, any
person who investigates or adjusts losses, or any person who
supervises the handling of claims must be licensed as an
(_______________)
◉ A Staff Adjuster. Answer: A (_____) is on the payroll of an insurance
company and is paid a salary or by the hour
