TEXAS SURPLUS LINES EXAMINATION TEST
2026 QUESTIONS WITH SOLUTIONS GRADED
A+
◉ Only pure risks (not speculative risks, like gambling) are insurable.
(T/F). Answer: True
◉ peril. Answer: cause of a loss
◉ hazard. Answer: condition that increases the chance of a peril
occurring.
◉ One way to manage risk is to transfer it, and this is commonly done
through _______. Answer: Purchasing Insurance
◉ To be insurable. Answer: a risk must be definable, measurable,
beyond the insured's control, common to a large group of people, and
not catastrophic
◉ adverse selection. Answer: which occurs when someone who is a high
risk tries to buy or maintain insurance.
, ◉ Loss. Answer: unwelcomed and unplanned reduction in economic
value.
◉ direct loss. Answer: immediate result of an event caused by a covered
peril
◉ indirect loss. Answer: more remote ramification than a direct loss, but
is still a result of loss from a covered peril.
◉ Exposure. Answer: the state of being subject to a possible loss, also
refers to the total extent of risk an insurer faces with an insured
◉ Moral hazards. Answer: losses that results from dishonesty
◉ Morale hazards. Answer: Arise from a state of mind that causes
indifference to loss, such as carelessness
◉ Physical hazards. Answer: Materials, situations, or things (including
chemicals) that can cause damage to property and immediate injury.
◉ risk management. Answer: using strategies to reduce the amount of
risk
◉ 5 Risk Management Techniques. Answer: avoiding the risk
2026 QUESTIONS WITH SOLUTIONS GRADED
A+
◉ Only pure risks (not speculative risks, like gambling) are insurable.
(T/F). Answer: True
◉ peril. Answer: cause of a loss
◉ hazard. Answer: condition that increases the chance of a peril
occurring.
◉ One way to manage risk is to transfer it, and this is commonly done
through _______. Answer: Purchasing Insurance
◉ To be insurable. Answer: a risk must be definable, measurable,
beyond the insured's control, common to a large group of people, and
not catastrophic
◉ adverse selection. Answer: which occurs when someone who is a high
risk tries to buy or maintain insurance.
, ◉ Loss. Answer: unwelcomed and unplanned reduction in economic
value.
◉ direct loss. Answer: immediate result of an event caused by a covered
peril
◉ indirect loss. Answer: more remote ramification than a direct loss, but
is still a result of loss from a covered peril.
◉ Exposure. Answer: the state of being subject to a possible loss, also
refers to the total extent of risk an insurer faces with an insured
◉ Moral hazards. Answer: losses that results from dishonesty
◉ Morale hazards. Answer: Arise from a state of mind that causes
indifference to loss, such as carelessness
◉ Physical hazards. Answer: Materials, situations, or things (including
chemicals) that can cause damage to property and immediate injury.
◉ risk management. Answer: using strategies to reduce the amount of
risk
◉ 5 Risk Management Techniques. Answer: avoiding the risk
