Texas Property and Casualty Practice Exam #1 Questions and
Answers.
Endorsements (riders) may only be used by insurers in which scenario?
If they were approved by the commissioner
A woman has a coin collection with multiple values of coins with a set price of 10,000. One coin
is missing, and the value of the collection has dropped to 9,000. Which provision states only
1,000 will be paid out?
Pair and set clause...
a) the value of the part of the set that was damaged
b) the value of the entire set so long as the remainder of the set is given to the insurer
A farm sprays herbicide on their crops and kills 500 trees on their neighbor's property, which of
the following is best described?
An occurrence (an accident, including continuous or repeated exposure to substantially the
same general harmful conditions)
Which of the following best describes a casualty loss?
Bodily injury, property damage, medical or death of another person (a loss as a result of
damage, destruction, or loss of property from any sudden, unexpected or unusual event)
Offering temporary coverage to an insured through oral or written contracts is known as:
A binder (i.e., placeholder)
The definition of punitive damages is best described as:
Awarded damages in excess of compensatory damages (compensatory damages are intended to
reimburse injured victim, while punitory damages are intended to penalize the at-fault party)
,An inland marine policy is most likely going to use which loss valuation?
Actual Cash Value (inland marine insurance protects business property when it is in transit or
stored at another location)
L has a homeowners policy, when she was struck by a vehicle and killed. Which of the following
would MOST LIKELY occur?
Policy automatically transfers to her legal representative
When would a person be eligible for income benefits under a workers compensation policy?
After satisfying the waiting period
Which of the following is included in a Business Owners Policy automatically?
Outdoor signs attached to the building
An insurer MAY use which of the following for underwriting purposes?
Sex (male/female)
In the event of a claim, who must the insured provide notice of claim to?
Insurer
, Which of the following is covered under a Homeowners 002 Broad form?
Theft
All of the following are covered under a DP-1, except:
Water sewer backup
What may an insurer check to determine the financial strength of a customer?
Credit report
A producer must contact the department of insurance within 30 days due to which scenario?
Administrative action from a governing body of another license
A Commercial General Liability policy's Medical Payments would cover whom?
A customer who injures themselves on the property
A store has a 100,000 property and burglary policy with a 250 deductible. A burglar breaks in
and steals 10,000 of merchandise and 3,000 of cash from the register, how much will be paid in
this claim?
$12,750
Answers.
Endorsements (riders) may only be used by insurers in which scenario?
If they were approved by the commissioner
A woman has a coin collection with multiple values of coins with a set price of 10,000. One coin
is missing, and the value of the collection has dropped to 9,000. Which provision states only
1,000 will be paid out?
Pair and set clause...
a) the value of the part of the set that was damaged
b) the value of the entire set so long as the remainder of the set is given to the insurer
A farm sprays herbicide on their crops and kills 500 trees on their neighbor's property, which of
the following is best described?
An occurrence (an accident, including continuous or repeated exposure to substantially the
same general harmful conditions)
Which of the following best describes a casualty loss?
Bodily injury, property damage, medical or death of another person (a loss as a result of
damage, destruction, or loss of property from any sudden, unexpected or unusual event)
Offering temporary coverage to an insured through oral or written contracts is known as:
A binder (i.e., placeholder)
The definition of punitive damages is best described as:
Awarded damages in excess of compensatory damages (compensatory damages are intended to
reimburse injured victim, while punitory damages are intended to penalize the at-fault party)
,An inland marine policy is most likely going to use which loss valuation?
Actual Cash Value (inland marine insurance protects business property when it is in transit or
stored at another location)
L has a homeowners policy, when she was struck by a vehicle and killed. Which of the following
would MOST LIKELY occur?
Policy automatically transfers to her legal representative
When would a person be eligible for income benefits under a workers compensation policy?
After satisfying the waiting period
Which of the following is included in a Business Owners Policy automatically?
Outdoor signs attached to the building
An insurer MAY use which of the following for underwriting purposes?
Sex (male/female)
In the event of a claim, who must the insured provide notice of claim to?
Insurer
, Which of the following is covered under a Homeowners 002 Broad form?
Theft
All of the following are covered under a DP-1, except:
Water sewer backup
What may an insurer check to determine the financial strength of a customer?
Credit report
A producer must contact the department of insurance within 30 days due to which scenario?
Administrative action from a governing body of another license
A Commercial General Liability policy's Medical Payments would cover whom?
A customer who injures themselves on the property
A store has a 100,000 property and burglary policy with a 250 deductible. A burglar breaks in
and steals 10,000 of merchandise and 3,000 of cash from the register, how much will be paid in
this claim?
$12,750
