TEXAS PROPERTY AND CASUALTY (2026)
comprehensive questions and verified detailed
solutions graded a+|100% correct!!
An insurance binder is best described as - correct answer ✔✔- temporary, short-
term evidence of coverage.
An insured owns a pet lion that is caged on the homeowner's property. The owner
takes great care to warn neighbors of the possible danger by posting signs, fencing
the yard, and locking the cage at all times. When a neighbor's child manages to
open the cage and is bitten, what type of liability would apply to the lion owner? -
correct answer ✔✔- absolute liability
Which of the following risks are insurable?
A) pure
B) whole
C)partial
D) speculative - correct answer ✔✔- a) pure
Methods of handling risk - correct answer ✔✔- starr
Sharing
Transfer
Avoidance
Retention
Reduction
1
,Exposure - correct answer ✔✔- possibility that a loss will occur
Direct - correct answer ✔✔- direct loss is a physical loss to property with no
intervening cause
Indirect - correct answer ✔✔- a consequential loss as the result from direct loss
Law of large numbers - correct answer ✔✔- the larger the group, the more
accurately losses can be predicted.
Elements of an. Insurable risk - correct answer ✔✔- canham
Calculable
Affordable
Non-catastrophic
Homogeneous
Accidental
Measurable
A flood is an example of? - correct answer ✔✔- a peril
Adverse selection - correct answer ✔✔- risks that have a greater than avg. Chace
of loss
Adverse selection - correct answer ✔✔- not wanted by insurers, high-risk
individuals. This is why insurers go through underwriting
2
, Reinsurance - correct answer ✔✔- an insurance company's insurance company.
This helps insurers spread their risk
Stock insurers - correct answer ✔✔- -owned by stockholders
-dividends not guaranteed
-dividends are paid to stockholders
-dividends are taxable to stockholders
-nonparticipating policies
Mutual insurers - correct answer ✔✔- -owned by policyholders
-dividends not guranteed
-dividends paid to policyholder
-dividends not taxable
-issue participating policies
All of the following are basic parts of an insurance contract except
A) declarations
B) conditions
C) exclusions
D) binders - correct answer ✔✔- binders
Which of the following terms is used to describe an empty building that is not
being used? - correct answer ✔✔- vacant
3
comprehensive questions and verified detailed
solutions graded a+|100% correct!!
An insurance binder is best described as - correct answer ✔✔- temporary, short-
term evidence of coverage.
An insured owns a pet lion that is caged on the homeowner's property. The owner
takes great care to warn neighbors of the possible danger by posting signs, fencing
the yard, and locking the cage at all times. When a neighbor's child manages to
open the cage and is bitten, what type of liability would apply to the lion owner? -
correct answer ✔✔- absolute liability
Which of the following risks are insurable?
A) pure
B) whole
C)partial
D) speculative - correct answer ✔✔- a) pure
Methods of handling risk - correct answer ✔✔- starr
Sharing
Transfer
Avoidance
Retention
Reduction
1
,Exposure - correct answer ✔✔- possibility that a loss will occur
Direct - correct answer ✔✔- direct loss is a physical loss to property with no
intervening cause
Indirect - correct answer ✔✔- a consequential loss as the result from direct loss
Law of large numbers - correct answer ✔✔- the larger the group, the more
accurately losses can be predicted.
Elements of an. Insurable risk - correct answer ✔✔- canham
Calculable
Affordable
Non-catastrophic
Homogeneous
Accidental
Measurable
A flood is an example of? - correct answer ✔✔- a peril
Adverse selection - correct answer ✔✔- risks that have a greater than avg. Chace
of loss
Adverse selection - correct answer ✔✔- not wanted by insurers, high-risk
individuals. This is why insurers go through underwriting
2
, Reinsurance - correct answer ✔✔- an insurance company's insurance company.
This helps insurers spread their risk
Stock insurers - correct answer ✔✔- -owned by stockholders
-dividends not guaranteed
-dividends are paid to stockholders
-dividends are taxable to stockholders
-nonparticipating policies
Mutual insurers - correct answer ✔✔- -owned by policyholders
-dividends not guranteed
-dividends paid to policyholder
-dividends not taxable
-issue participating policies
All of the following are basic parts of an insurance contract except
A) declarations
B) conditions
C) exclusions
D) binders - correct answer ✔✔- binders
Which of the following terms is used to describe an empty building that is not
being used? - correct answer ✔✔- vacant
3
