TX Personal Lines License Exam Latest Test Bank A
with 400 Exam Prep Questions and Correct Answers/
Texas Personal Lines Test – Property and Casualty
Latest 2025-2026 Prep Test Bank
No one whose license has been revoked can receive another license in Texas for -
ANSWER-5 years
An individual licensed as an agent must notify the Texas Department of Insurance,
on a monthly basis, of all of the following EXCEPT - ANSWER-any change in
business name
An insurance professional advises a client regarding the benefits of her life
insurance policy, in exchange for a fee. Which of the following terms best
describes this type of insurance professional? - ANSWER-counselor
Which of the following statements concerning an insurance solicitor is
INCORRECT? - ANSWER-a solicitor may represent as many agents as will
appoint him/her
All authorized property and casualty insurers must be members of all of these
organizations EXCEPT - ANSWER-Texas Dept of Insurance
If a fire erupts in the kitchen and spreads to the upstairs bedroom, resulting in the
destruction of furniture, what type of loss has occurred? - ANSWER-direct
Which of the following actions is NOT in violation of the Unfair Claims
Settlement Practices Act? - ANSWER-denying an unsubstantiated claim
pg. 1
,The difference in the contents coverage on an HO-3 and HO-5 is which of the
following? - ANSWER-contents are covered open peril on HO-5, and named peril
on HO-3
The HO-3 homeowners policy provides - ANSWER-Open peril coverage on the
dwelling and broad form coverage on personal property.
All of the following are types of adjuster's licenses available in this state EXCEPT
- ANSWER-life and health claims adjuster
The requirement that agents not commingle insurance monies with their own funds
is known as - ANSWER-fiduciary responsibility
If an insurer meets the state's financial requirements and is approved to transact
business in the state, it is considered what type of insurer? - ANSWER-authorized
In Texas, the Commissioner of Insurance is - ANSWER-appointed by the
Governor
A $100,000 house insured on a policy with an 80% coinsurance requirement has a
fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage.
how much can the owner collect for his loss? - ANSWER-$30,000
An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by
hail and must be replaced. The new roof will cost $6,000 at today's prices. If the
roof has been depreciating at $200 per year and his policy is ACV, how much will
it pay toward the insured's new roof? - ANSWER-$5,000
pg. 2
,When transacting business in this state an insurer formed under the laws of another
country is known as a/an - ANSWER-alien insurer
Anyone who violates the Insurance Code of Texas may be fined up to - ANSWER-
$25,000
An insured condominium unit owner wants to purchase fire and extended coverage
for personal property and liability coverage for himself and his family members.
He should purchase - ANSWER-HO-6
An insured has a standard HO-4 policy with a $30,000 limit of coverage for
personal property. While he was travelling, a fire in his hotel destroys clothes and
luggage with a replacement value of $10,000 and jewelry with a replacement value
of $10,000. Disregarding any deductible, and assuming a depreciation of 20% has
occurred in both properties, what amount is the insurer obligated to pay? -
ANSWER-$16,000
Under the dwelling policy form, what is the maximum time limit during which
multiple volcanic activities would be considered part of one occurrence? -
ANSWER-72 hours
Which of the following risks would NOT be eligible for coverage under a
homeowners policy? - ANSWER-an applicant who owns and lives on a
commercial farm
When is liability coverage included in a homeowners policy? - ANSWER-is is
included automatically
pg. 3
, If an insured is in the process of moving to a new location, his personal property
coverage under the dwelling policy will apply on a pro rata basis at both locations
for - ANSWER-30 days
Which of the following claims would be included under the dwelling policy? -
ANSWER-fire damage to the insured's rowboat stored in the attached garage
Under Coverage C of a homeowners policy, the amount of insurance provided to
cover personal property of the insured is - ANSWER-50% of the amount provided
as Coverage A
In property insurance, actual cash value is defined as which of the following? -
ANSWER-Replacement cost at the time of the loss, less depreciation.
For the purpose of insurance, risk is defined as - ANSWER-the uncertainty or
chance of loss
What is the purpose of the coinsurance clause found in property insurance
policies? - ANSWER-Encourage the insured to insure the property closer to its full
value.
Peril is most easily defined as - ANSWER-The cause of loss insured against
Which of the following best expresses the purpose of a state value contract? -
ANSWER-To pre-establish the amount of coverage available for property items
that are difficult to value.
For the reported losses of an insured group to become more likely to equal the
statistical probability of loss for that particular class, the insured group must
become - ANSWER-larger
pg. 4
with 400 Exam Prep Questions and Correct Answers/
Texas Personal Lines Test – Property and Casualty
Latest 2025-2026 Prep Test Bank
No one whose license has been revoked can receive another license in Texas for -
ANSWER-5 years
An individual licensed as an agent must notify the Texas Department of Insurance,
on a monthly basis, of all of the following EXCEPT - ANSWER-any change in
business name
An insurance professional advises a client regarding the benefits of her life
insurance policy, in exchange for a fee. Which of the following terms best
describes this type of insurance professional? - ANSWER-counselor
Which of the following statements concerning an insurance solicitor is
INCORRECT? - ANSWER-a solicitor may represent as many agents as will
appoint him/her
All authorized property and casualty insurers must be members of all of these
organizations EXCEPT - ANSWER-Texas Dept of Insurance
If a fire erupts in the kitchen and spreads to the upstairs bedroom, resulting in the
destruction of furniture, what type of loss has occurred? - ANSWER-direct
Which of the following actions is NOT in violation of the Unfair Claims
Settlement Practices Act? - ANSWER-denying an unsubstantiated claim
pg. 1
,The difference in the contents coverage on an HO-3 and HO-5 is which of the
following? - ANSWER-contents are covered open peril on HO-5, and named peril
on HO-3
The HO-3 homeowners policy provides - ANSWER-Open peril coverage on the
dwelling and broad form coverage on personal property.
All of the following are types of adjuster's licenses available in this state EXCEPT
- ANSWER-life and health claims adjuster
The requirement that agents not commingle insurance monies with their own funds
is known as - ANSWER-fiduciary responsibility
If an insurer meets the state's financial requirements and is approved to transact
business in the state, it is considered what type of insurer? - ANSWER-authorized
In Texas, the Commissioner of Insurance is - ANSWER-appointed by the
Governor
A $100,000 house insured on a policy with an 80% coinsurance requirement has a
fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage.
how much can the owner collect for his loss? - ANSWER-$30,000
An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by
hail and must be replaced. The new roof will cost $6,000 at today's prices. If the
roof has been depreciating at $200 per year and his policy is ACV, how much will
it pay toward the insured's new roof? - ANSWER-$5,000
pg. 2
,When transacting business in this state an insurer formed under the laws of another
country is known as a/an - ANSWER-alien insurer
Anyone who violates the Insurance Code of Texas may be fined up to - ANSWER-
$25,000
An insured condominium unit owner wants to purchase fire and extended coverage
for personal property and liability coverage for himself and his family members.
He should purchase - ANSWER-HO-6
An insured has a standard HO-4 policy with a $30,000 limit of coverage for
personal property. While he was travelling, a fire in his hotel destroys clothes and
luggage with a replacement value of $10,000 and jewelry with a replacement value
of $10,000. Disregarding any deductible, and assuming a depreciation of 20% has
occurred in both properties, what amount is the insurer obligated to pay? -
ANSWER-$16,000
Under the dwelling policy form, what is the maximum time limit during which
multiple volcanic activities would be considered part of one occurrence? -
ANSWER-72 hours
Which of the following risks would NOT be eligible for coverage under a
homeowners policy? - ANSWER-an applicant who owns and lives on a
commercial farm
When is liability coverage included in a homeowners policy? - ANSWER-is is
included automatically
pg. 3
, If an insured is in the process of moving to a new location, his personal property
coverage under the dwelling policy will apply on a pro rata basis at both locations
for - ANSWER-30 days
Which of the following claims would be included under the dwelling policy? -
ANSWER-fire damage to the insured's rowboat stored in the attached garage
Under Coverage C of a homeowners policy, the amount of insurance provided to
cover personal property of the insured is - ANSWER-50% of the amount provided
as Coverage A
In property insurance, actual cash value is defined as which of the following? -
ANSWER-Replacement cost at the time of the loss, less depreciation.
For the purpose of insurance, risk is defined as - ANSWER-the uncertainty or
chance of loss
What is the purpose of the coinsurance clause found in property insurance
policies? - ANSWER-Encourage the insured to insure the property closer to its full
value.
Peril is most easily defined as - ANSWER-The cause of loss insured against
Which of the following best expresses the purpose of a state value contract? -
ANSWER-To pre-establish the amount of coverage available for property items
that are difficult to value.
For the reported losses of an insured group to become more likely to equal the
statistical probability of loss for that particular class, the insured group must
become - ANSWER-larger
pg. 4
