USAA LICENSING EXAMS FINAL PAPER 2026
TEST PAPER QUESTIONS AND SOLUTIONS
GRADED A+
◉ Hazard. Answer: Condition that create or increases the chance or
loss or contributes to the loss
◉ Physical Hazard. Answer: Visible ( operational features of a risk)
◉ Moral Hazard. Answer: Intentional dishonesty or illegal actions of
a person (arson)
◉ Morale Hazard. Answer: Carelessness or indifference ( attitude).
Takes additional risks (negligence)
◉ Pure Risk. Answer: Chance of loss. Insurable
◉ Law of Large Numbers. Answer: Law of average. Helps predict
future losses accurately (sets pricing for insurance)
◉ Speculative Risk. Answer: Chance of gain/loss. NOT Insurable
(gambling)
,◉ The 4 Parts of an Insurance Contract. Answer: D.I.C.E
Declarations,
Insuring Agreement,
Conditions,
Exclusions
◉ Declarations. Answer: Who is insured (dec sheet) Contains:
Policy Number, Premium, Term (Period of Coverage), Policy Limits,
Person/Property
◉ Risk. Answer: The chance of loss or uncertainty of loss
◉ Direct Loss. Answer: Immediate actual physical damage to
tangible property
◉ Indirect Loss. Answer: Inability to use property as a result of
direct Loss ( loss of use)
◉ Conditions. Answer: Duties or responsibility of both the insured &
insurer
◉ Primary Policy. Answer: This policy pays FIRST.
, ◉ Excess Policy. Answer: This policy pays AFTER primary has been
exhausted
◉ Pro Rata. Answer: Applies when both polices are primary, they
will pay on a proportional basis (bigger policy pays more) Equal
limits 50/50
◉ Insuring Agreement. Answer: Insurance Company's promise to
pay. Tells us what peril/s the policy covers
◉ Supplementary Payments. Answer: B.A.I.L.E.D
Bonds- (Max $250)
Aid- First aid expenses
Internet- Judgements in appeal
Loss of Earnings- Up to $250 per day in defending investigation
claim
Expenses- Incurred by the insured to assist in defense of a claim
Defense Costs- Paid with no limit
◉ Insurable Interest. Answer: The loss would cause you financial
hardship
TEST PAPER QUESTIONS AND SOLUTIONS
GRADED A+
◉ Hazard. Answer: Condition that create or increases the chance or
loss or contributes to the loss
◉ Physical Hazard. Answer: Visible ( operational features of a risk)
◉ Moral Hazard. Answer: Intentional dishonesty or illegal actions of
a person (arson)
◉ Morale Hazard. Answer: Carelessness or indifference ( attitude).
Takes additional risks (negligence)
◉ Pure Risk. Answer: Chance of loss. Insurable
◉ Law of Large Numbers. Answer: Law of average. Helps predict
future losses accurately (sets pricing for insurance)
◉ Speculative Risk. Answer: Chance of gain/loss. NOT Insurable
(gambling)
,◉ The 4 Parts of an Insurance Contract. Answer: D.I.C.E
Declarations,
Insuring Agreement,
Conditions,
Exclusions
◉ Declarations. Answer: Who is insured (dec sheet) Contains:
Policy Number, Premium, Term (Period of Coverage), Policy Limits,
Person/Property
◉ Risk. Answer: The chance of loss or uncertainty of loss
◉ Direct Loss. Answer: Immediate actual physical damage to
tangible property
◉ Indirect Loss. Answer: Inability to use property as a result of
direct Loss ( loss of use)
◉ Conditions. Answer: Duties or responsibility of both the insured &
insurer
◉ Primary Policy. Answer: This policy pays FIRST.
, ◉ Excess Policy. Answer: This policy pays AFTER primary has been
exhausted
◉ Pro Rata. Answer: Applies when both polices are primary, they
will pay on a proportional basis (bigger policy pays more) Equal
limits 50/50
◉ Insuring Agreement. Answer: Insurance Company's promise to
pay. Tells us what peril/s the policy covers
◉ Supplementary Payments. Answer: B.A.I.L.E.D
Bonds- (Max $250)
Aid- First aid expenses
Internet- Judgements in appeal
Loss of Earnings- Up to $250 per day in defending investigation
claim
Expenses- Incurred by the insured to assist in defense of a claim
Defense Costs- Paid with no limit
◉ Insurable Interest. Answer: The loss would cause you financial
hardship
