USAA Licensing Exam Questions and
Correct Answers | Latest Update
2026 VERSION| Graded A+
pre-loss economic or financial condition. Law of Large
numbers - ANSWER//Mathematical principle used by
insurers to predict losses to charge the appropriate
premiums Insurable Interest - ANSWER//Proof that
someone stands to lose financially if a loss occurs; must
exist at the time of the loss in property and casualty
insurance Binder - ANSWER//Temporary insurance
contract; commits the company to act as if a policy has
been issued Peril - ANSWER//Cause of loss Direct Loss
- ANSWER//Immediate actual physical damage to
tangible property Indirect loss - ANSWER//Inability to
use property as a result of a direct loss Risk -
ANSWER//Chance of loss; uncertainty of loss What are
the two types of risk? - ANSWER//Speculative and Pure
Speculative Risk - ANSWER//Involves the simultaneous
chance of gain or loss: is not insurable Pure Risk -
ANSWER//a risk that presents the chance of loss but no
opportunity for gain (insurable) What are two examples
of speculative risk? - ANSWER//Gambling Investing
What is an example of your risk? - ANSWER//Car
accident Physical hazards include - ANSWER//Visible
condition that increases the chance of loss Morale
Hazard - ANSWER//Attitude of carelessness or
indifference to loss Insurer - ANSWER//The insurance
company (a.k.a. second party to the contract) Named
Insured - ANSWER//A party named on the declarations
,who is purchasing the insurance policy (a.k.a. first party
to the contract) Insured - ANSWER//Who the insurer
promises to protect in addition to the named insured
Limit of Liability - ANSWER//The maximum amount
that can be paid for a covered loss Consideration -
ANSWER//An exchange of value between parties to a
contract Waiver - ANSWER//The voluntary
relinquishment of a known right What is Estopple? -
ANSWER//When an agent tells an insured/makes the
statement there is coverage for a loss when there is no
such coverage, then the insurer is prevented from
denying the claim as a result of what precedent?
Concealment - ANSWER//Insured or prospect
deliberately withholding material information from the
insurer, this voids coverage Material Misrepresentation -
ANSWER//Insured or prospect giving incorrect material
information to the insurer, this voids coverage Warranty
- ANSWER//A written condition in the policy that must
be true at the time of the loss Texas Department of
Insurance - ANSWER//In Texas, the insurance industry
is regulated by the Commissioner - ANSWER//The
(_______) is appointed by the governor and heads the
Texas Department of Insurance Adjuster -
ANSWER//According to the Texas Insurance Code, any
person who investigates or adjusts losses, or any person
who supervises the handling of claims must be licensed
as an (_______________) A Staff Adjuster -
ANSWER//A (_____) is on the payroll of an insurance
company and is paid a salary or by the hour Independent
Adjuster - ANSWER//A (___) handles claims for one or
more insurance companies and receives a fee based on
time and expense. Public Adjuster - ANSWER//A (__)
works on behalf of the insured in negotiating a claim
,settlement. In Texas a (______) requires another separate
license called a "public adjusters license". Insurance
Agent - ANSWER//Persons marketing (Selling)
insurance products are called (___) Alien Insurer -
ANSWER//An insurer organized and domiciled outside
the United States is called an (_____) Domestic Insurer -
ANSWER//An insurer organized, admitted, and writing
insurance in Texas is called a (______) A Foreign
Insurer - ANSWER//An insurer domiciled outside the
state where she writes business is called a (____) Unfair
Claim Settlement - ANSWER//An adjuster intentionally
lowballs the claim settlement by offering less than the
amount owed to the insured Unfair Claim Settlement
Practices Act - ANSWER//An Agent collects a premium
for a policy, but does not send it to the company and
allows a policy to be canceled Unfair Claims Settlement
Practices Act - ANSWER//The insurance company fails
to adopt reasonable standards for processing claims
Unfair Claim Settlement - ANSWER//If an adjuster were
to deny a claim without conducting a reasonable
investigation. This would be an example of what type of
claim settlement violation? Supplemental Coverages -
ANSWER//The insurance company defends the insured
for a suit arising out of a covered claim An unfair claims
settlement practice. - ANSWER//If an adjuster were to
deny a claim without providing the policyholder with a
reasonable explanation for the denial, this would be an
example of what type of claims settlement practice? An
unfair claims settlement practice - ANSWER//If the
adjuster tells the insured that he has no coverage under a
policy when the coverage really exists, this would be an
example of what type of claims settlement practice? 15
days - ANSWER//How many days does an adjust have to
, acknowledge the claim 15 Business days -
ANSWER//How many days does an adjust have to
accept or reject the claim after he receives complete
information? 5 calendar days - ANSWER//How many
days does an adjuster have to send the check after he
agrees to pay the claim? What hazards does Standard
Fire Protection cover? - ANSWER//(FLI)Fire, Lightning,
Internal Explosions What hazards does Name Peril
"Basic" Cover? - ANSWER//(FLI)+ W-Wind C- Civil
Commotion S- Smoke H- Hail A- Aircraft V- Vehicle
not owned by the insured V- Volcano activity E-
Explosion R- Riot M- Malicious Mischief What hazards
are covered under "Named Peril Broad" coverage? -
ANSWER//(FLI+WCSHAVVERM) & B- Burglary
Damage I- Ice/Sleet/Snow G- Glass Coverage A-
Accidental Discharge/Overflow F- Falling Objects F-
Freezing Pluming E- Electric Current C- Collapse
Coverage T- Tearing Appart What hazards or perils are
listed in the "Special Exclusions" policy? -
ANSWER//Building Ordinances Mechanical Breakdown
War & Nuclear Power Surge - Offcite International Acts
Earthquake Flood Temporary/ Emergency License -
ANSWER//A special allowance that can be made by the
Texas Insurance Commissioner for an insurance
company employee during an emergency for the
purposes of training? Five day's notice - ANSWER//How
many days notice must a company give the
Commissioner to issue a temporary license or emergency
license to an individual for the pruposes of training?
Who is responsible for the actions of the licensee once an
emergency or temporary license has been issued? -
ANSWER//The firm requesting the license is
responsible.. A Property and Casualty Adjuster licenses
Correct Answers | Latest Update
2026 VERSION| Graded A+
pre-loss economic or financial condition. Law of Large
numbers - ANSWER//Mathematical principle used by
insurers to predict losses to charge the appropriate
premiums Insurable Interest - ANSWER//Proof that
someone stands to lose financially if a loss occurs; must
exist at the time of the loss in property and casualty
insurance Binder - ANSWER//Temporary insurance
contract; commits the company to act as if a policy has
been issued Peril - ANSWER//Cause of loss Direct Loss
- ANSWER//Immediate actual physical damage to
tangible property Indirect loss - ANSWER//Inability to
use property as a result of a direct loss Risk -
ANSWER//Chance of loss; uncertainty of loss What are
the two types of risk? - ANSWER//Speculative and Pure
Speculative Risk - ANSWER//Involves the simultaneous
chance of gain or loss: is not insurable Pure Risk -
ANSWER//a risk that presents the chance of loss but no
opportunity for gain (insurable) What are two examples
of speculative risk? - ANSWER//Gambling Investing
What is an example of your risk? - ANSWER//Car
accident Physical hazards include - ANSWER//Visible
condition that increases the chance of loss Morale
Hazard - ANSWER//Attitude of carelessness or
indifference to loss Insurer - ANSWER//The insurance
company (a.k.a. second party to the contract) Named
Insured - ANSWER//A party named on the declarations
,who is purchasing the insurance policy (a.k.a. first party
to the contract) Insured - ANSWER//Who the insurer
promises to protect in addition to the named insured
Limit of Liability - ANSWER//The maximum amount
that can be paid for a covered loss Consideration -
ANSWER//An exchange of value between parties to a
contract Waiver - ANSWER//The voluntary
relinquishment of a known right What is Estopple? -
ANSWER//When an agent tells an insured/makes the
statement there is coverage for a loss when there is no
such coverage, then the insurer is prevented from
denying the claim as a result of what precedent?
Concealment - ANSWER//Insured or prospect
deliberately withholding material information from the
insurer, this voids coverage Material Misrepresentation -
ANSWER//Insured or prospect giving incorrect material
information to the insurer, this voids coverage Warranty
- ANSWER//A written condition in the policy that must
be true at the time of the loss Texas Department of
Insurance - ANSWER//In Texas, the insurance industry
is regulated by the Commissioner - ANSWER//The
(_______) is appointed by the governor and heads the
Texas Department of Insurance Adjuster -
ANSWER//According to the Texas Insurance Code, any
person who investigates or adjusts losses, or any person
who supervises the handling of claims must be licensed
as an (_______________) A Staff Adjuster -
ANSWER//A (_____) is on the payroll of an insurance
company and is paid a salary or by the hour Independent
Adjuster - ANSWER//A (___) handles claims for one or
more insurance companies and receives a fee based on
time and expense. Public Adjuster - ANSWER//A (__)
works on behalf of the insured in negotiating a claim
,settlement. In Texas a (______) requires another separate
license called a "public adjusters license". Insurance
Agent - ANSWER//Persons marketing (Selling)
insurance products are called (___) Alien Insurer -
ANSWER//An insurer organized and domiciled outside
the United States is called an (_____) Domestic Insurer -
ANSWER//An insurer organized, admitted, and writing
insurance in Texas is called a (______) A Foreign
Insurer - ANSWER//An insurer domiciled outside the
state where she writes business is called a (____) Unfair
Claim Settlement - ANSWER//An adjuster intentionally
lowballs the claim settlement by offering less than the
amount owed to the insured Unfair Claim Settlement
Practices Act - ANSWER//An Agent collects a premium
for a policy, but does not send it to the company and
allows a policy to be canceled Unfair Claims Settlement
Practices Act - ANSWER//The insurance company fails
to adopt reasonable standards for processing claims
Unfair Claim Settlement - ANSWER//If an adjuster were
to deny a claim without conducting a reasonable
investigation. This would be an example of what type of
claim settlement violation? Supplemental Coverages -
ANSWER//The insurance company defends the insured
for a suit arising out of a covered claim An unfair claims
settlement practice. - ANSWER//If an adjuster were to
deny a claim without providing the policyholder with a
reasonable explanation for the denial, this would be an
example of what type of claims settlement practice? An
unfair claims settlement practice - ANSWER//If the
adjuster tells the insured that he has no coverage under a
policy when the coverage really exists, this would be an
example of what type of claims settlement practice? 15
days - ANSWER//How many days does an adjust have to
, acknowledge the claim 15 Business days -
ANSWER//How many days does an adjust have to
accept or reject the claim after he receives complete
information? 5 calendar days - ANSWER//How many
days does an adjuster have to send the check after he
agrees to pay the claim? What hazards does Standard
Fire Protection cover? - ANSWER//(FLI)Fire, Lightning,
Internal Explosions What hazards does Name Peril
"Basic" Cover? - ANSWER//(FLI)+ W-Wind C- Civil
Commotion S- Smoke H- Hail A- Aircraft V- Vehicle
not owned by the insured V- Volcano activity E-
Explosion R- Riot M- Malicious Mischief What hazards
are covered under "Named Peril Broad" coverage? -
ANSWER//(FLI+WCSHAVVERM) & B- Burglary
Damage I- Ice/Sleet/Snow G- Glass Coverage A-
Accidental Discharge/Overflow F- Falling Objects F-
Freezing Pluming E- Electric Current C- Collapse
Coverage T- Tearing Appart What hazards or perils are
listed in the "Special Exclusions" policy? -
ANSWER//Building Ordinances Mechanical Breakdown
War & Nuclear Power Surge - Offcite International Acts
Earthquake Flood Temporary/ Emergency License -
ANSWER//A special allowance that can be made by the
Texas Insurance Commissioner for an insurance
company employee during an emergency for the
purposes of training? Five day's notice - ANSWER//How
many days notice must a company give the
Commissioner to issue a temporary license or emergency
license to an individual for the pruposes of training?
Who is responsible for the actions of the licensee once an
emergency or temporary license has been issued? -
ANSWER//The firm requesting the license is
responsible.. A Property and Casualty Adjuster licenses
