TEXAS PROPERTY & CASUALTY
LICENSE LATEST EXAM ACTUAL EXAM
110 QUESTIONS AND CORRECT DETAILED
ANSWERS | 2026|2027 ALREADY GRADED A+
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
1
,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
What is a hazard? - CORRECT ANSWER ✔✔- things that increase the chance of
a peril happening
Three types of hazards - CORRECT ANSWER ✔✔- Physical: visible
characteristic (dead tree)
Moral: Dishonest tendencies
Morale: Attitude of carelessness
Proximate Cause - CORRECT ANSWER ✔✔- First cause in an unbroken chain of
events
Elements of a legal contract (CALC) - CORRECT ANSWER ✔✔- C - Competent
parties (18/Right frame of mind)
A - Agreement (Both parties agree)
L - Legal Purpose (The risk is LEGAL)
C - Consideration (It has to be fair)
What is representation? - CORRECT ANSWER ✔✔- Information believed to be
true.
2
, What is misrepresentation? - CORRECT ANSWER ✔✔- Information that is not
true. False information.
What is material misrepresentation? - CORRECT ANSWER ✔✔- Information that
is not true but would have caused the insurer not to issue the policy. (4 prev spd
tix)
What is fraud? - CORRECT ANSWER ✔✔- An all out effort by one party to
deceive and cheat the other.
What is warranty? - CORRECT ANSWER ✔✔- Guarantee that an insured will or
will not do something
What are the four major parts to an insurance policy structure? (DICE) -
CORRECT ANSWER ✔✔- D - Declarations Page (First Page)
I - Insuring Agreement (Insurers promise to pay)
C - Conditions (Rules)
E - Exclusions (Not covered)
What information is on the declarations page? (Remember 6 Ps) - CORRECT
ANSWER ✔✔- Policy Number
Parties
Property Description/Location
Policy Term
Policy Limits/Deductibles
Premium
3
LICENSE LATEST EXAM ACTUAL EXAM
110 QUESTIONS AND CORRECT DETAILED
ANSWERS | 2026|2027 ALREADY GRADED A+
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
1
,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
What is a hazard? - CORRECT ANSWER ✔✔- things that increase the chance of
a peril happening
Three types of hazards - CORRECT ANSWER ✔✔- Physical: visible
characteristic (dead tree)
Moral: Dishonest tendencies
Morale: Attitude of carelessness
Proximate Cause - CORRECT ANSWER ✔✔- First cause in an unbroken chain of
events
Elements of a legal contract (CALC) - CORRECT ANSWER ✔✔- C - Competent
parties (18/Right frame of mind)
A - Agreement (Both parties agree)
L - Legal Purpose (The risk is LEGAL)
C - Consideration (It has to be fair)
What is representation? - CORRECT ANSWER ✔✔- Information believed to be
true.
2
, What is misrepresentation? - CORRECT ANSWER ✔✔- Information that is not
true. False information.
What is material misrepresentation? - CORRECT ANSWER ✔✔- Information that
is not true but would have caused the insurer not to issue the policy. (4 prev spd
tix)
What is fraud? - CORRECT ANSWER ✔✔- An all out effort by one party to
deceive and cheat the other.
What is warranty? - CORRECT ANSWER ✔✔- Guarantee that an insured will or
will not do something
What are the four major parts to an insurance policy structure? (DICE) -
CORRECT ANSWER ✔✔- D - Declarations Page (First Page)
I - Insuring Agreement (Insurers promise to pay)
C - Conditions (Rules)
E - Exclusions (Not covered)
What information is on the declarations page? (Remember 6 Ps) - CORRECT
ANSWER ✔✔- Policy Number
Parties
Property Description/Location
Policy Term
Policy Limits/Deductibles
Premium
3
