TEXAS INSURANCE LICENSE QUIZ EXAM
PAPER 2026 QUESTIONS WITH CORRECT
ANSWERS GRADED A+
⩥ Henry's tires on his SUV are so worn that the steel belt is showing
through the tread. The condition of the tires is known as. Answer:
PHYSICAL HAZARDS
⩥ When a driver of an auto breaks the posted speed limit, the driver's
liability imposed by the law is known as. Answer: ABOSLUTE
LIABILITY
⩥ Under compensatory damages, medical expenses are an example of.
Answer: SPECIAL damages.
⩥ Josh attends a hockey game. While at the game he is hit in the head by
the hockey puck resulting in a broken cheek bone. Josh immediately
sues the hockey team for damages. What might be the most logical
defense for the hockey team?. Answer: ASSUMPTION OF RISK
⩥ The Smith family is planning to build a new house. They want the
house to be constructed entirely of fire resistance materials. This
construction type is an example of a. Answer: FIRE RESISTIVE
building.
,⩥ ________ contracts are written for a specified amount and they list the
value of the insured property as agreed to by both the insured and the
insurer at policy inception.. Answer: Susie set fire to her house to collect
the insurance. This is an example of a(n) MORAL HAZARDS
⩥ Henry's tires on his SUV are so worn that the steel belt is showing
through the tread. The condition of the tires is known as. Answer:
PHYSICAL HAZARDS
⩥ When a driver of an auto breaks the posted speed limit, the driver's
liability imposed by the law is known as. Answer: ABOSLUTE
LIABILITY
⩥ Under compensatory damages, medical expenses are an example of.
Answer: SPECIAL damages.
⩥ Josh attends a hockey game. While at the game he is hit in the head by
the hockey puck resulting in a broken cheek bone. Josh immediately
sues the hockey team for damages. What might be the most logical
defense for the hockey team?. Answer: ASSUMPTION OF RISK
⩥ The Smith family is planning to build a new house. They want the
house to be constructed entirely of fire resistance materials. This
construction type is an example of a. Answer: FIRE RESISTIVE
building.
,⩥ ______contracts are written for a specified amount and they list the
value of the insured property as agreed to by both the insured and the
insurer at policy inception.. Answer: VALUED
⩥ The ABC Company has several business locations. They want to
cover all the locations under one policy. They should purchase a(n).
Answer: BLANKET policy
⩥ A building has a market value of $100,000, a replacement cost of
$80,000 and a depreciated amount of $25,000. Based on these factors,
what is the ACV amount of the building?. Answer: ($80,000 - $25,000 =
$55,000) Actual cash value, or ACV is usually calculated by determining
the item's replacement cost (what it would cost to buy a replacement)
and subtracting an amount for depreciation. Here's what it looks like
written as a formula: ACV = Replacement Cost - Depreciation
⩥ Joe has just purchased a new house. He wants to obtain the broadest
possible insurance coverage. Joe should purchase a(n). Answer:
SPECIAL FORMS policy.
⩥ Which of the following is NOT a method by which an insured can
collect for damages?. Answer: In general, the insured can collect the
lesser of: Insurable interest; Policy limits; Actual cash value; Cost to
repair; or Replacement cost.
, ⩥ Which one of the following terms can be defined as a policy provision
that omits certain risks from coverage?. Answer: EXCLUSIONS
⩥ Joe asked his insurance agent to explain the purpose of the conditions
section of his insurance policy. Joe's agent stated that it is used to
_____.. Answer: Policy conditions
⩥ Jane has decided to add towing to her current auto policy with the
ABC Insurance Company. What must the ABC Insurance Company do
to add the requested change to the policy?. Answer: ENDORSEMENTS
⩥ Doug has just received his insurance policy. Where would Doug look
to find the applicable deductibles declared in the insurance policy?.
Answer: DECLARATIONS
⩥ The XYZ Insurance Company is developing a new auto insurance
contract. Which of the following is NOT considered a major component
of this insurance contract?. Answer: The contract does not require the
naming of senior officers of the insurance company.
⩥ Crossroad's commercial insurance coverage is automatically extended
to cover newly acquired or constructed locations and personal property
covered off-premises within the policy territory. Which is generally
NOT covered under the policy territory? . On commercial policies, the
policy territory is usually the United States, Canada and Puerto Rico..
Answer:
PAPER 2026 QUESTIONS WITH CORRECT
ANSWERS GRADED A+
⩥ Henry's tires on his SUV are so worn that the steel belt is showing
through the tread. The condition of the tires is known as. Answer:
PHYSICAL HAZARDS
⩥ When a driver of an auto breaks the posted speed limit, the driver's
liability imposed by the law is known as. Answer: ABOSLUTE
LIABILITY
⩥ Under compensatory damages, medical expenses are an example of.
Answer: SPECIAL damages.
⩥ Josh attends a hockey game. While at the game he is hit in the head by
the hockey puck resulting in a broken cheek bone. Josh immediately
sues the hockey team for damages. What might be the most logical
defense for the hockey team?. Answer: ASSUMPTION OF RISK
⩥ The Smith family is planning to build a new house. They want the
house to be constructed entirely of fire resistance materials. This
construction type is an example of a. Answer: FIRE RESISTIVE
building.
,⩥ ________ contracts are written for a specified amount and they list the
value of the insured property as agreed to by both the insured and the
insurer at policy inception.. Answer: Susie set fire to her house to collect
the insurance. This is an example of a(n) MORAL HAZARDS
⩥ Henry's tires on his SUV are so worn that the steel belt is showing
through the tread. The condition of the tires is known as. Answer:
PHYSICAL HAZARDS
⩥ When a driver of an auto breaks the posted speed limit, the driver's
liability imposed by the law is known as. Answer: ABOSLUTE
LIABILITY
⩥ Under compensatory damages, medical expenses are an example of.
Answer: SPECIAL damages.
⩥ Josh attends a hockey game. While at the game he is hit in the head by
the hockey puck resulting in a broken cheek bone. Josh immediately
sues the hockey team for damages. What might be the most logical
defense for the hockey team?. Answer: ASSUMPTION OF RISK
⩥ The Smith family is planning to build a new house. They want the
house to be constructed entirely of fire resistance materials. This
construction type is an example of a. Answer: FIRE RESISTIVE
building.
,⩥ ______contracts are written for a specified amount and they list the
value of the insured property as agreed to by both the insured and the
insurer at policy inception.. Answer: VALUED
⩥ The ABC Company has several business locations. They want to
cover all the locations under one policy. They should purchase a(n).
Answer: BLANKET policy
⩥ A building has a market value of $100,000, a replacement cost of
$80,000 and a depreciated amount of $25,000. Based on these factors,
what is the ACV amount of the building?. Answer: ($80,000 - $25,000 =
$55,000) Actual cash value, or ACV is usually calculated by determining
the item's replacement cost (what it would cost to buy a replacement)
and subtracting an amount for depreciation. Here's what it looks like
written as a formula: ACV = Replacement Cost - Depreciation
⩥ Joe has just purchased a new house. He wants to obtain the broadest
possible insurance coverage. Joe should purchase a(n). Answer:
SPECIAL FORMS policy.
⩥ Which of the following is NOT a method by which an insured can
collect for damages?. Answer: In general, the insured can collect the
lesser of: Insurable interest; Policy limits; Actual cash value; Cost to
repair; or Replacement cost.
, ⩥ Which one of the following terms can be defined as a policy provision
that omits certain risks from coverage?. Answer: EXCLUSIONS
⩥ Joe asked his insurance agent to explain the purpose of the conditions
section of his insurance policy. Joe's agent stated that it is used to
_____.. Answer: Policy conditions
⩥ Jane has decided to add towing to her current auto policy with the
ABC Insurance Company. What must the ABC Insurance Company do
to add the requested change to the policy?. Answer: ENDORSEMENTS
⩥ Doug has just received his insurance policy. Where would Doug look
to find the applicable deductibles declared in the insurance policy?.
Answer: DECLARATIONS
⩥ The XYZ Insurance Company is developing a new auto insurance
contract. Which of the following is NOT considered a major component
of this insurance contract?. Answer: The contract does not require the
naming of senior officers of the insurance company.
⩥ Crossroad's commercial insurance coverage is automatically extended
to cover newly acquired or constructed locations and personal property
covered off-premises within the policy territory. Which is generally
NOT covered under the policy territory? . On commercial policies, the
policy territory is usually the United States, Canada and Puerto Rico..
Answer:
