Texas All-Lines Adjuster Pre-Licensing
Exam-Graded A
insurance - ANSWER-financial took that protects individual and organizations from
unforeseen and extraordinary financial losses by transferring risk to another party
insured - ANSWER-individual or organization that pays premiums in exchange for
protection
insurer - ANSWER-company, group, or government agency offering financial protection
how does insurance work? - ANSWER-insured pays premium
insurer promises to pay for specific losses if they occur
insurer's promise gives peace of mind to insured
principle of indemnity - ANSWER-when a loss occurs, an individual should be restored
to the approximate financial condition he was in before the loss, no more and no less
Q1: How can insurance companies afford to pay for an individual's catastrophic loss? -
ANSWER-
Q1: The purpose of the principle of indemnity: - ANSWER-prevents an insured from
profiting from a loss
Q1: Which of the following best defines premium? - ANSWER-the fee paid by the
insured in exchange for the insurance policy
Q1: What best describes insurance? - ANSWER-an economic device used to protect
against the risk of unforeseen and extraordinary financial loss
Q1: Mark incurred $8000 damage to his car in an accident. He received $8000 from his
insurance company and $4000 from the other driver. By receiving profit from his loss,
Mark could be in violation of: - ANSWER-the principle of indemnity
he should be in the same financial condition. no better, no worse
indemnification may include payment for: - ANSWER-repairs to property
reimbursement for additional living expenses
,rental cars, hotels
costs directly associated with a loss, as allowed under the policy
legal contract/insurance policy is: - ANSWER-contract to provide financial protection for
a fee
legally binding because it meets the 4 requirements of a legal contract
What are the 4 requirements of a legal contract? - ANSWER-agreement (offer and
acceptance)
consideration
competent parties
legal purpose
agreement - ANSWER-mutual consent between offeror and offeree
acceptance criteria - ANSWER-offeree communicates to the offeror his intent to enter
into contract
must be unconditional - the offeree accepts the terms proposed by the offeror
original offeree is the only person who can legally accept the offer
An offer may be terminated by: - ANSWER-revocation by offeror
rejection by offeree
time lapse
termination by operation of law
-either party dies or becomes disabled
-performance of contract becomes illegal after the offer
-subject matter is destroyed
offer rejection - ANSWER-explicit rejection
proposal of new offer
counteroffer
consideration - ANSWER-all parties bring something of value
, competent parties - ANSWER-18 years old, sober, and sane
legal purpose - ANSWER-no contracts for money laundering
Q2: An offeree may legally reject a contract offer by any of the following means
EXCEPT: - ANSWER-asking for clarification or additional information
Q2: If covered by an insurance policy, an insured may be indemnified for all of the
following except: - ANSWER-home remodels
Q2: Which of the following is NOT a requirement for a legally binding contract? -
ANSWER-it must be a notarized document
Q2: Which of the following refers to being restored to the financial condition you were in
before a loss? - ANSWER-indemnification
Q2: A legally binding contract is where the risk of financial loss is transferred in
exchange for premiums is called: - ANSWER-an insurance policy
1-A: The purpose of the principle of indemnity is: - ANSWER-to prevent and insured
from making a profit on a loss
1-A: Which of the following best defines premium? - ANSWER-the fee paid by the
insured in exchange for an insurance policy
1-A: What is a reserve, in insurance terms? - ANSWER-a pool of collected premiums
that the insurer sets aside to pay claims
1-A: Which of the following refers to being restored to the financial condition you were in
before a loss? - ANSWER-indemnification
six special characteristics of insurance contracts - ANSWER-personal
adhesion
utmost good faith
aleatory
unilateral
conditional
personal contract - ANSWER-protects policyholder from financial losses
does not protect property from becoming damaged
Exam-Graded A
insurance - ANSWER-financial took that protects individual and organizations from
unforeseen and extraordinary financial losses by transferring risk to another party
insured - ANSWER-individual or organization that pays premiums in exchange for
protection
insurer - ANSWER-company, group, or government agency offering financial protection
how does insurance work? - ANSWER-insured pays premium
insurer promises to pay for specific losses if they occur
insurer's promise gives peace of mind to insured
principle of indemnity - ANSWER-when a loss occurs, an individual should be restored
to the approximate financial condition he was in before the loss, no more and no less
Q1: How can insurance companies afford to pay for an individual's catastrophic loss? -
ANSWER-
Q1: The purpose of the principle of indemnity: - ANSWER-prevents an insured from
profiting from a loss
Q1: Which of the following best defines premium? - ANSWER-the fee paid by the
insured in exchange for the insurance policy
Q1: What best describes insurance? - ANSWER-an economic device used to protect
against the risk of unforeseen and extraordinary financial loss
Q1: Mark incurred $8000 damage to his car in an accident. He received $8000 from his
insurance company and $4000 from the other driver. By receiving profit from his loss,
Mark could be in violation of: - ANSWER-the principle of indemnity
he should be in the same financial condition. no better, no worse
indemnification may include payment for: - ANSWER-repairs to property
reimbursement for additional living expenses
,rental cars, hotels
costs directly associated with a loss, as allowed under the policy
legal contract/insurance policy is: - ANSWER-contract to provide financial protection for
a fee
legally binding because it meets the 4 requirements of a legal contract
What are the 4 requirements of a legal contract? - ANSWER-agreement (offer and
acceptance)
consideration
competent parties
legal purpose
agreement - ANSWER-mutual consent between offeror and offeree
acceptance criteria - ANSWER-offeree communicates to the offeror his intent to enter
into contract
must be unconditional - the offeree accepts the terms proposed by the offeror
original offeree is the only person who can legally accept the offer
An offer may be terminated by: - ANSWER-revocation by offeror
rejection by offeree
time lapse
termination by operation of law
-either party dies or becomes disabled
-performance of contract becomes illegal after the offer
-subject matter is destroyed
offer rejection - ANSWER-explicit rejection
proposal of new offer
counteroffer
consideration - ANSWER-all parties bring something of value
, competent parties - ANSWER-18 years old, sober, and sane
legal purpose - ANSWER-no contracts for money laundering
Q2: An offeree may legally reject a contract offer by any of the following means
EXCEPT: - ANSWER-asking for clarification or additional information
Q2: If covered by an insurance policy, an insured may be indemnified for all of the
following except: - ANSWER-home remodels
Q2: Which of the following is NOT a requirement for a legally binding contract? -
ANSWER-it must be a notarized document
Q2: Which of the following refers to being restored to the financial condition you were in
before a loss? - ANSWER-indemnification
Q2: A legally binding contract is where the risk of financial loss is transferred in
exchange for premiums is called: - ANSWER-an insurance policy
1-A: The purpose of the principle of indemnity is: - ANSWER-to prevent and insured
from making a profit on a loss
1-A: Which of the following best defines premium? - ANSWER-the fee paid by the
insured in exchange for an insurance policy
1-A: What is a reserve, in insurance terms? - ANSWER-a pool of collected premiums
that the insurer sets aside to pay claims
1-A: Which of the following refers to being restored to the financial condition you were in
before a loss? - ANSWER-indemnification
six special characteristics of insurance contracts - ANSWER-personal
adhesion
utmost good faith
aleatory
unilateral
conditional
personal contract - ANSWER-protects policyholder from financial losses
does not protect property from becoming damaged
