REAL Texas Adjuster Study Guide2023-
2024/ 367 QUESTIONS AND ANSWERS
1. perils: a cause of property losses under an insurance con- tract ex: windstorm, hurricane,
explosion, collapse of build-ing, vandalism, accidental discharge, and theft
2. law of large numbers: a fundamental concept in statisticsand probability that describes how
the average of a random-ly selected large sample from a population. it basically re- lies on the
principle that the larger the pool, the more pre-dictable the amount of losses will be in a given
period
3. principle of indemnity: is an insurance principle stating that an insured may not be compensated
by insurance company in an amount exceeding the insured's economic loss.
4. limits of liability: the maximum amount that an insurance pol- icy will pay. it is specified on the
policy declaration page.
5. property insurance: coverage for real and personal prop- erty against loss or damage from
perils insured against.
6. loss settlement: the process used to determine the amount of the loss
7. actual cash value: the value of the property based on thecurrent cost to replace it minus
depreciation.
8. agreed value: the amount that the insured and insureragree upon during the time of policy
inception.
9. replacement cost: the cost associated with replacing prop-erty at current market prices
10. market value: the amount that the property is worth in acompetitive market. this amount is
accepted by the buyer andseller.
11. tort: is a wrong that involves a breach of civil duty owedto someone else. this breach
determines if that person is neg-ligence.
12. elements used to determine negligence: a duty owed, a dutybreached, proximate cause,
and damages
13. methods to determine loss are:: acv, market value, replace-ment cost, agreed value
14. casualty insurance: protects a person from financial lossarising from bodily injury or property
,damage to others
15. hazard: is a situation that poses a level of threat to life,health, property, or environment.
16. indirect loss: type of loss that does not result from di- rect damage of a covered cause of loss
or peril but is insteada consequence of the direct damage loss.
17. direct loss: direct physical loss to property
18. insuring agreement: this section of the insurance policy specifies what the insurance will
provide coverage for in ex-change for premium payments by their customer.
19. deductible: the amount the insured must pay in a loss be-fore any payment is due from
the insurance company.
20. where is a homeowner percentage deductible always takenfrom?: coverage a structure
policy limits of liability that is used on the declaration page.
21. cancellation: is the termination of an insurance policy byeither side and it must be done in
writing
22. liability: a person is legally liable for an accident if thatperson is found responsible for
bodily injury or property damage to another party.
23. negligence: the failure to exercise the care that a reason- ably prudent person can be
characterized by the average per- son.
24. additional living expenses: charges covered by homeown-ers policy over and above policy
holders customary living due to damage by a covered peril and makes the home tempo-rary
uninhabitable.
25. exposure: the measure of the possibility of the loss
26. insured: the party to an insurance arrangement that has aninsurable interest in the property
that is being insured.
27. insurer: insurance company
28. loss history: is the insured history of losses with other companies. insurance company
views this as indication of in-sured propensity for a claim in future.
,29. notice of loss: notice required by the insurance company immediately after an incident. policy
holder responsibility af-ter a loss
30. depreciation: act of lowering an item due to value wear and tear it is based on age, condition,
and life expectancy.
31. punitive damage: the amount awarded by the court which is intended to reform or deter the
defendant from engaging insimilar conduct in the future
32. comparative negligence: is a partial legal defense that re-duces the amount of damages
that a person can recover based upon the amount that this person's own negligence con-tributed to
the loss
33. contributory negligence: is a law defense where a personnegligence contributed to the harm
that he or she sustained
34. assumption of risk: a doctrine under which a plaintiff may not recover for injuries or damage
suffered from risks he or she knows of and has voluntarilyassumed
35. adverse selection: the tendency of insured's who present a higher probability of loss to
purchase or renew insurancemore often than those who present a lower probability
36. attractive nuisance: a dangerous place, condition, or object that is particularly attractive
to children.
37. accident: unforeseen, unintended event, something unex-pected
38. occurrence: an event that results in an insured loss whichresults in bodily injury or damages
39. betterment: improvement of property that puts it in a bet-ter condition than it was before the
occupancy or loss
40. all risk insurance: "open perils" insurance - protecting the insured from loss arising from any
peril other than those perils specifically excluded by name
41. appraisal: is a form of dispute resolution that occurs when there is a dispute between the
insured and the insurancecompany regarding the amount of the claim or loss. both par-ties hire an
appraisal and if cant decide then they will hire anumpire
, 42. breach of contract: the failure to comply with terms or conditions of an insurance policy that
may result in restrict-ed coverage or void the policy.
43. bodily injury: physical pain, illness or any impairment of physical condition
44. concealment: the withholding of known facts which, if material, can void a contract or not pay
out on claims related to that material information
45. damages: the amount claimed by or awarded to an injured party as compensation for liability
owing to bodily injury orproperty damage
46. fraud: intentional lying or misrepresentation by policyholder or claim adjusters of a
material fact in order to in-flate a claim payment or receive a claim payment that wouldotherwise
not be paid or void the contract
47. incurred expenses: expenses that have already been sus- tained and have not been paid ex:
an additional living expense claim is a reimbursement of incurred expenses.
48. loss payee: the person designated on an insurance policy as the one to be paid in case the
property is damaged/destroyed
49. claimant: is a party who makes a claim
50. co insurance clause: a clause in an insurance policy under which the insured agrees to
maintain insurance equal to some specified percentage of the property value or otherwise to
assume a portion of any loss
51. collision: coverage that pays for damages to your car with-out regards to who caused the
accident. covers a collision with another object, car, or from a rollover.
52. commercial general liability: insurance that covers many of the common commercial
general liability loss exposures faced by an organization, including its premises, operations, and
products. an employee working in a cus- tomer's home trips and injures the customer causing
property damage the employ-ee and business would be covered under
53. catastrophe: a severe disaster that involves a large popu- lation and generates large amount of
property damage
54. comprehensive coverage: insurance that pays for damage to your car caused by something
other than a collision, such as damage from storms, fire,
2024/ 367 QUESTIONS AND ANSWERS
1. perils: a cause of property losses under an insurance con- tract ex: windstorm, hurricane,
explosion, collapse of build-ing, vandalism, accidental discharge, and theft
2. law of large numbers: a fundamental concept in statisticsand probability that describes how
the average of a random-ly selected large sample from a population. it basically re- lies on the
principle that the larger the pool, the more pre-dictable the amount of losses will be in a given
period
3. principle of indemnity: is an insurance principle stating that an insured may not be compensated
by insurance company in an amount exceeding the insured's economic loss.
4. limits of liability: the maximum amount that an insurance pol- icy will pay. it is specified on the
policy declaration page.
5. property insurance: coverage for real and personal prop- erty against loss or damage from
perils insured against.
6. loss settlement: the process used to determine the amount of the loss
7. actual cash value: the value of the property based on thecurrent cost to replace it minus
depreciation.
8. agreed value: the amount that the insured and insureragree upon during the time of policy
inception.
9. replacement cost: the cost associated with replacing prop-erty at current market prices
10. market value: the amount that the property is worth in acompetitive market. this amount is
accepted by the buyer andseller.
11. tort: is a wrong that involves a breach of civil duty owedto someone else. this breach
determines if that person is neg-ligence.
12. elements used to determine negligence: a duty owed, a dutybreached, proximate cause,
and damages
13. methods to determine loss are:: acv, market value, replace-ment cost, agreed value
14. casualty insurance: protects a person from financial lossarising from bodily injury or property
,damage to others
15. hazard: is a situation that poses a level of threat to life,health, property, or environment.
16. indirect loss: type of loss that does not result from di- rect damage of a covered cause of loss
or peril but is insteada consequence of the direct damage loss.
17. direct loss: direct physical loss to property
18. insuring agreement: this section of the insurance policy specifies what the insurance will
provide coverage for in ex-change for premium payments by their customer.
19. deductible: the amount the insured must pay in a loss be-fore any payment is due from
the insurance company.
20. where is a homeowner percentage deductible always takenfrom?: coverage a structure
policy limits of liability that is used on the declaration page.
21. cancellation: is the termination of an insurance policy byeither side and it must be done in
writing
22. liability: a person is legally liable for an accident if thatperson is found responsible for
bodily injury or property damage to another party.
23. negligence: the failure to exercise the care that a reason- ably prudent person can be
characterized by the average per- son.
24. additional living expenses: charges covered by homeown-ers policy over and above policy
holders customary living due to damage by a covered peril and makes the home tempo-rary
uninhabitable.
25. exposure: the measure of the possibility of the loss
26. insured: the party to an insurance arrangement that has aninsurable interest in the property
that is being insured.
27. insurer: insurance company
28. loss history: is the insured history of losses with other companies. insurance company
views this as indication of in-sured propensity for a claim in future.
,29. notice of loss: notice required by the insurance company immediately after an incident. policy
holder responsibility af-ter a loss
30. depreciation: act of lowering an item due to value wear and tear it is based on age, condition,
and life expectancy.
31. punitive damage: the amount awarded by the court which is intended to reform or deter the
defendant from engaging insimilar conduct in the future
32. comparative negligence: is a partial legal defense that re-duces the amount of damages
that a person can recover based upon the amount that this person's own negligence con-tributed to
the loss
33. contributory negligence: is a law defense where a personnegligence contributed to the harm
that he or she sustained
34. assumption of risk: a doctrine under which a plaintiff may not recover for injuries or damage
suffered from risks he or she knows of and has voluntarilyassumed
35. adverse selection: the tendency of insured's who present a higher probability of loss to
purchase or renew insurancemore often than those who present a lower probability
36. attractive nuisance: a dangerous place, condition, or object that is particularly attractive
to children.
37. accident: unforeseen, unintended event, something unex-pected
38. occurrence: an event that results in an insured loss whichresults in bodily injury or damages
39. betterment: improvement of property that puts it in a bet-ter condition than it was before the
occupancy or loss
40. all risk insurance: "open perils" insurance - protecting the insured from loss arising from any
peril other than those perils specifically excluded by name
41. appraisal: is a form of dispute resolution that occurs when there is a dispute between the
insured and the insurancecompany regarding the amount of the claim or loss. both par-ties hire an
appraisal and if cant decide then they will hire anumpire
, 42. breach of contract: the failure to comply with terms or conditions of an insurance policy that
may result in restrict-ed coverage or void the policy.
43. bodily injury: physical pain, illness or any impairment of physical condition
44. concealment: the withholding of known facts which, if material, can void a contract or not pay
out on claims related to that material information
45. damages: the amount claimed by or awarded to an injured party as compensation for liability
owing to bodily injury orproperty damage
46. fraud: intentional lying or misrepresentation by policyholder or claim adjusters of a
material fact in order to in-flate a claim payment or receive a claim payment that wouldotherwise
not be paid or void the contract
47. incurred expenses: expenses that have already been sus- tained and have not been paid ex:
an additional living expense claim is a reimbursement of incurred expenses.
48. loss payee: the person designated on an insurance policy as the one to be paid in case the
property is damaged/destroyed
49. claimant: is a party who makes a claim
50. co insurance clause: a clause in an insurance policy under which the insured agrees to
maintain insurance equal to some specified percentage of the property value or otherwise to
assume a portion of any loss
51. collision: coverage that pays for damages to your car with-out regards to who caused the
accident. covers a collision with another object, car, or from a rollover.
52. commercial general liability: insurance that covers many of the common commercial
general liability loss exposures faced by an organization, including its premises, operations, and
products. an employee working in a cus- tomer's home trips and injures the customer causing
property damage the employ-ee and business would be covered under
53. catastrophe: a severe disaster that involves a large popu- lation and generates large amount of
property damage
54. comprehensive coverage: insurance that pays for damage to your car caused by something
other than a collision, such as damage from storms, fire,
