Texas Property & Casualty Insurance Exam – Test Questions and Answers (2026/2027)

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Terms in this set (422)


A condition or situation exposure
that presents a possibility
of loss is a (an):

The purpose of insurance transfer risk
is to:

Which hazard can be morale
described as a careless
attitude or general
indifference on the part
of the insured toward the
occurrence of loss?

Which risk is insurable? pure

With regard to insurance, uncertainty regarding loss
risk can be defined as:

Treating risk by transfer
purchasing insurance is
an example of what type
of risk management?

Robert and Carolyn live avoidance
in a busy city and decide
that not owning a car is
the solution to not
experience having a car
stolen. What method
describes this
philosophy?




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Dishonesty on the part of a moral hazard
an insured is an example
of what?

What is an example of Installing a burglar alarm
reduction as a method of
handling risk?

Driving too fast and not morale hazard
wearing a seat belt are
examples of?

The risk that involves the speculative risk
chance of both loss and
gain is?

Self-insurance is an Retention
example of what kind of
risk treatment?

If John's father transfers Yes because he has an insurable interest.
ownership of a house to
John, can John buy
insurance?

Fire would be an peril
example of a what?

What is the actual cause peril
of a loss?

What kind of risk is the speculative risk
stock market?

A ____ is a condition that hazard
increases the chance of
loss.

Faulty wiring causes a fire hazard
that destroys a building.
The faulty wiring is
considered to be a(n):




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A chance, possibility, or risk
uncertainty of loss is
known as?

Examples of perils fire, wind and lightning
are_____?

Indemnity insurance will restores insured to pre-loss condition
_____?

The types of hazards moral, morale, and physical
are_____?

________ is when people Adverse selection
with a greater than
average exposure to loss
to purchase insurance.




Methods of handling risk Sharing (ARRTS)
are avoidance, reduction,
retention, transfer and
_____.

Elements of insurable risk Measurable (CANHAM)
are calculable,
affordable, non-
catastrophic,
homogenous, accidental
and _____.

Myron, who is 16, signs a He is not competent at 16.
contract to lease a car.
This would probably not
be considered a valid
contract under the law
because _____.




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Ben bought an $6,000
automobile four years
ago for $15,000. Today it
is worth $6,000.
According to the
principle of indemnity,
how much should Ben
receive if the car is totally
demolished?

Harry Arne and his cousin $80,000
each own 50% of a
$160,000 duplex.
Suppose Harry
purchases $160,000 of
insurance on the home. If
it burns to the ground,
how much would Harry
collect?

Under a unilateral Insurer only
contract, which parties
are legally bound to
perform under the
contract?

Which part of an Conditions
insurance policy
describes the
responsibilities and
obligations of both the
insurance company and
the insured under the
policy?

The insuring agreement perils
section of a policy
describes the ____ you are
insured against.




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